The Joint Commissioner of Commercial Taxes (Suo Motu Revision) and The Deputy Commercial Tax Officer (E.T.F.S) vs K. Shanmugasundaram, Lessee Proprietor of Sakthi Theatre, K. Shanmugasundaram, Lessee Proprietor of Kalaignar Karunanidhi Thirai Arangam and K. Shanmugasundaram, Lessee Proprietor of Karpagam Theatre

P.K. Misra, J.—Heard Mr. Haja Naziruddin, Special Government Pleader for the appellants and Mr.S. Ramanathan for Respondent.

The present appeals have been directed against the common order passed by the learned single Judge in W.P.Nos. 3864 3865 & 3586 of

1992. Such writ petitions had been filed by the present Respondent for quashing the assessment order in respect of three theatres as confirmed

upto the stage of revision and also the penalty.

Initially the original authority levied penalty at 150%, but such penalty was reduced to 50% by the second revisional authority, namely, the Joint

Commissioner of Commercial Taxes. Learned single Judge, while upholding the orders relating to assessment of payability of entertainment tax, has

quashed penalty only on the ground that previous history of the writ petitioner was very clear and the writ petition was not an habitual offender of

such nature.

As per Section 7B(3) of the Tamil Nadu Entertainments Tax Act, 1939, power to levy penalty is contemplated if the concerned authority comes

to the conclusion that tax had not been levied due to wilful mis- statement or suppression of facts. Before such provision was amended by Tamil

Nadu Act 25 of 1982, power was to levy penalty not exceeding 150%. However, after such amendment was effected, the penalty to be assessed

shall be:

(a) fifty per cent of tax assessed or reassessed, i`f the tax paid as per the return, falls short of the tax assessed or reassessed by not more than ten

per cent;

(b) one hundred per cent of tax assessed or reassessed, if the tax as per the return, falls short of the tax assessed or reassessed by more than ten

per cent but not more than fifty per cent;

(c) one hundred and fifty per cent of tax assessed or reassessed, if the tax paid as per the return, falls short of the tax assessed or reassessed by

more than fifty per cent.

It is not in dispute that the present matter relates to asessment years 1975-76 and 1976-77 i.e., before the Tamil Nadu Entertainments Tax Act

was amended by Tamil Nadu Act 25 of 1982. In other words, the extent of penalty could go upto 150%. In the present case, as already

observed, the learned single Judge has set aside the order relating to payment of penalty solely on the ground that the petitioner was not an habitual

offender. It is apparent from Section 7-B(3) that penalty is to be imposed if the authority comes to the conclusion that tax had not been levied on

account of any wilful mis-statement or suppression of facts by the proprietor. Learned single Judge has no where discussed about such aspect and

at any rate the learned single Judge has confirmed the order of assessment. In the absence of any finding by the learned single Judge to the effect

that there was no wilful mis-statement or suppression of facts by the proprietor, there was no scope to come to a conclusion that penalty should

not have been levied. Therefore, to that extent the order passed by the learned single Judge is not sustainable.

Next question is relating to quantum of penalty. As already noticed, before amendment, the quantum of penalty could go upto 150%, but after

amendment effected by Act 25 of 1982, penalty payable has been fixed at three different slabs as apparent from Section 7-B(3)(a), 7- B(3)(b)

and 7-B(3)(c), as the case may be. In other words, before the amendment, there was discretion relating to quantum of penalty imposed. It is not in

dispute that during pendency of the writ petition the petitioner had been directed to deposit 25% of the penalty levied.

Having regard to the fact that the matter relates to about 30 years back, we feel interest of justice would be served by modifying the quantum of

penalty to the amount already deposited by the petitioner. In such view of the matter, while setting aside the order of the learned single Judge, we

direct that the amount already deposited shall be the penalty payable and such deposited amount, which is still lying in deposit with the Department,

shall be adjusted towards penalty payable and no further amount would be payable by the present Respondent. Similarly it is made clear that the

direction of the learned single Judge relating to refund of the amount along with 12% interest shall not be operative.

The writ appeals are allowed in part to the extent indicated above. No costs.