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Judgment
F.M. Ibrahim Kalifulla J.
The Commercial Tax Department is the petitioner. The questions of law raised in this revision are as follows :
(1) Whether the Sales Tax Appellate Tribunal is right in holding that no penalty is leviable u/s 16(2) of the Tamil Nadu General Sales Tax Act, 1959, if the turnover is culled out from the books of accounts ? and
(2) Whether the Sales Tax Appellate Tribunal is right in holding that the sale of packing materials effected by the assessee to M/s. Natchiar Spinning Mills Limited would come under the purview of section 5(3) of the Tamil Nadu General Sales Tax Act, 1959, in the absence of any acceptable legal evidence showing that the actual exporter M/s. Natchiar Textile Exporters are agents of Natchiar Spinning Mills Limited ?
As far as the levy of penalty, which has been raised as first question of law, is concerned, the assessment order pertains to 1996-97 and 1997-98 and it is by now well-settled that the levy of penalty could have been made only in a case where the assessment is best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee except during the period from December 3, 1979 to May 27, 1993. Since the relevant assessment years with which we are concerned pertain to 1996-97 and 1997-98 and it has been concluded by the lower appellate authorities that the whole assessment was based on the figures available in the books of account and not outside the accounts falling u/s 12 (1) of the Tamil Nadu General Sales Tax Act for both the assessment years and not falling u/s 12(2) of the Act, there was no scope for levy of penalty u/s 12(3) or 16(2) of the Act. We are, therefore, convinced that the conclusion of the Tribunal in affirming the order of the Appellate Assistant Commissioner deleting the penalty was well justified and there is no scope to interfere with the same. The first question of law is thus answered against the petitioner.
As far as the second question of law is concerned, the Tribunal dealt with the same in paragraph 4(b) which reads as under :
4(b) Next we verified the facts as far as the dispute regarding the claim of exemption made u/s 5(3) of the Central Sales Tax Act, 1956 relating to the sales of packing materials effected by the respondent/ assessee to Tvl. Natchiar Spinning Mills Ltd., which has been exported by Tvl. Natchiar Textile Exporters, for which Tvl. Natchiar Spinning Mills Ltd., had given the certificate provided under G.O. prescribed in Notification No. II/CT & RE/46/a-9/89 dated March 20, 1987. The learned Appellate Assistant Commissioner verified the entire facts and found that even though the packing materials were used by Tvl. Natchiar Textile Exporters for export of yarn, this is as per the contract entered into with principal Natchiar Spinning Mills. He had relied on the Contract No. 277/97 dated December 30, 1996, 306/97 dated March 1, 1997, etc. As per the contract the Appellate Assistant Commissioner found that the person exported the yarn is an agent of the buyer, viz., Natchiar Spinning Mills. He concluded that the transaction as falling under the category of principal/agency transaction and he allowed the claim after following the decisions in C.A. Akhtar & Company v. State of Tamil Nadu reported in [1981] 47 STC 62 (Mad) and State of Tamil Nadu v. Vinyl Cable Industries [1994] 94 STC 346 (Mad).
The Tribunal has thus reached a finding of fact with reference to the transaction of the respondent-assessee by way of agency sale to an exporter. In the circumstances, in the absence of any perversity in the finding so reached by the Tribunal there is no scope to hold otherwise. Therefore, the second question of law also is answered against the petitioner and in favour of the assessee. The tax case revision, therefore, fails and the same is dismissed.