Indian Kanoon - Search engine for Indian Law

3.Challenging the orders of assessment, the petitioner preferred appeals before the Appellate Assistant Commissioner (CT), Chennai, who, by a common order dated 25.06.1999, set aside the original assessment orders and remanded the matter to the assessing officer for fresh consideration, after verifying the entries in the registers for all the years, in which they had filled up all the details of purchases and its disposal in packing vanaspathi and oil etc. Pursuant to the said order of remand, after examining the objections filed by the petitioner, the assessing officer / first respondent passed the revised https://www.mhc.tn.gov.in/judis  WP Nos. 44296 to 44298 of 2006 assessment orders dated 28.03.2002, confirming the earlier assessment orders levying tax and penalty at 150%, with a finding that the TNGST Act prohibited any dealer from issuance of Form XVII for their purchases of packing material prior to 1993 under section 3(3); and contravention of the provision of the Act resulted in misuse of Form XVII and such an act was punishable under section 23 of the TNGST Act.

6.Per contra, the learned Additional Government Pleader (Taxes) appearing for the respondents would contend that the tin containers purchased by the petitioner against form XVII did not fulfil the condition incorporated in the TNGST Act namely "for use by the latter in the manufacture inside the State". The Assessing Officer, upon considering the objections raised by the petitioner categorically held that the tin containers would be eligible for concessional rate of tax, only if they are used as an integral component in the https://www.mhc.tn.gov.in/judis  WP Nos. 44296 to 44298 of 2006 manufacturing process and not otherwise. According to Section 3 (3) of the Act, the goods which are used in the manufacture of other product alone, can be purchased at concessional duty against form XVII. Accordingly, the Assessing Officer was wholly justified in disallowing the claim of concessional rate of tax made by the petitioner, which is in accordance with the law prevailing during the relevant assessment years. The said finding of the assessing officer was rightly confirmed by the appellate authorities. Therefore, the learned counsel prayed for dismissal of the writ petitions.

15.In view of the aforesaid legal principles and also considering the fact https://www.mhc.tn.gov.in/judis  WP Nos. 44296 to 44298 of 2006 that prior to amendment of section 3(3), the packing materials were excluded from the concessional rate of tax against form XVII declaration and there is no material to prove that the tin containers purchased by the petitioner were used in the manufacturing activity, this court finds no good reason to interfere with the well considered findings of the Authorities below, disallowing the concessional rate of tax under section 3(3), against issuance of form XVII declaration, during the material point of time. The first issue is accordingly, answered against the petitioner.

“In this case the assessing authority has levied penalty under section 23 of the TNGST Act at 1-1/2 times the tax due on the disputed turnover. But on appeal the first appellate authority has modified the quantum of penalty to one time i.e.100% instead of 150% levied by the assessing officer. The contention of the State is that the purchase of tin container against Form XVII is an offence as the dealers are not entitled to https://www.mhc.tn.gov.in/judis  WP Nos. 44296 to 44298 of 2006 tin containers against Form XVII and that the above purchasers have also not been used in manufacture of oil and therefore the commission of offence and guiltiness is apparent in this case. Therefore the penalty leviable is only 150% and it cannot be reduced to 100% as the sections 23 do not contemplate such graded levy of penalty. The claim of the State has been examined. Section 23 has been extracted above. It enables the assessing officer to impose a penalty in a sum not exceeding 1-1/2 times the tax payable on the turnover that means the quantum of penalty should not exceed 150%. Thus it enables the assessing authority to levy penalty either 50% or 100% or at 150%. In this case the assessing officer has levied maximum penalty at 150% whereas the first appellate authority has reduced the same to 100% which is no doubt is in accordance with the provisions of Section 23 of the TNGST Act and so we find no illegality in the order of the first appellate authority and we sustain the order of the first appellate authority”.