Supreme Court of India

M/S. ARUL & CO.versusSTATE OF TAMIL NADU & ANR.

Citation: 2009 INSC 566
Decided: 21 April 2009
Disposal: Disposed off
Bench: ARIJIT PASAYAT

Holding

The levy of tax stands, but the penalty imposed is set aside.

Summary

M/s. Arul & Co. challenged the levy of sales tax and a penalty imposed under the Tamil Nadu General Sales Tax Act, 1959, by filing a writ petition. The Madras High Court dismissed the petition, relying on an earlier Division Bench decision. On appeal, the higher court held that there was no ground to interfere with the tax assessment, but found the penalty to be unwarranted and set it aside. Consequently, the tax demand remains enforceable while the penalty is cancelled. The appeal was disposed of accordingly.

Issues considered

Whether the levy of tax under the Tamil Nadu General Sales Tax Act, 1959 can be interfered with by the court.
Whether the penalty imposed in addition to the tax is legally valid.

Legislation cited

Tamil Nadu General Sales Tax Act, 1959

Subjects

Sales TaxPenaltyTamil Nadu General Sales Tax ActTax AssessmentWrit PetitionAppellate Jurisdiction

Judgment

                                 [2009] 7 S. C.R. 305


                                  M/s. ARUL & CO.                               A
                                          v.
                         STATE OF TAMIL NADU & ANR.
                         Criminal Appeal No. 4617 of 2002
                                  APRIL 21, 2009
                                                                                B
                 [DR. ARIJIT PASAYAT AND LOKESHWAR SINGH
                                  PANTA, JJ.]
    ~·-           Tamil Nadu General Sales Tax Act, 1959 :
                Sales Tax-Imposition of -Penalty also levied - For
          reasons stated in the connected appeal, no scope for C
          interference withe the levy of tax made - However, penalty
          imposed is set aside.
               CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4617
'         of 2004
               From the Judgement and Order dated 29.01.2004 of the             D
          High Court of Judicature at M'adras· in Writ Petition No. 43203
          of 2002
                 K.K. Mani, Mayur R. Shah, for the Appellants.
                  R. Nedumaran, for the Respondents.                            E
                 The Judgement of the Court was delivered by
                 DR. ARIJIT PASAYAT, J.
                 1. Challenge in this appeal is to the judgment of a Division
          Bench of the Madras High Court dismissing the writ petition
          filed by the appellant. The High Court relied on the decision of a    F
          Division Bench of the High Court against the assessee in writ
          petition No. 14768 of 2000 dated 11.12.2003. For reasons
          indicated in Civil appeal No. 5134-35 of2002 disposed of today,
          we find there is no scope for interference with the levy of tax
          made. However, the' penalty imposed stands set aside because          G
          of what is stated in the said appeals.
                 2. The appeal is accordingly disposed of.
          G.N.                                          Appeal disposed of.
                                         305

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