Supreme Court of India
SREE KRISHNA ELECTRICALSversusSTATE OF TAMIL NADU & ANR.
- Citation
- 2009 INSC 577
- Decided
- 21 April 2009
- Disposal
- Disposed off
- Bench
- ARIJIT PASAYAT
Holding
The sale of complete wet grinders, not merely parts, is taxable under the Act, but a penalty cannot be imposed where the omitted items are disclosed in the assessee’s own books.
Summary
Sree Krishna Electricals, a dealer registered under the Tamil Nadu General Sales Tax Act, 1959, was assessed sales tax and a penalty for the alleged sale of wet grinders during the assessment years 1992-93 and 1993-94. The dealer contended that only parts of wet grinders were sold, seeking exemption, and relied on the earlier judgment in State of Tamil Nadu v. Suguna Agencies. The High Court, following S. Durai v. Joint Commissioner of Commercial Taxes, held that the dealer had sold complete wet grinders, a new commodity, and therefore the tax liability stood. The Supreme Court affirmed this factual finding, stating there was no ground to interfere with the tax assessment. Regarding the penalty, the Court observed that the items omitted from the turnover were disclosed in the dealer’s own books, and consequently, a penalty could not be imposed. The penalty was set aside while the tax assessment was upheld, and the appeals were disposed of.
Issues considered
- Whether the sale of wet grinder parts constitutes the sale of a complete wet grinder for purposes of the Tamil Nadu General Sales Tax Act, 1959.
- Whether a penalty can be levied when the assessee has disclosed the omitted items in his own account books.
Legislation cited
Subjects
sales taxwet grinderparts versus wholepenaltydisclosureTamil Nadu General Sales Tax Acttax assessmentexemption
Judgment
[2009] 6 S.C.R. 809
SREE KRISHNA ELECTRICALS A
V.
STATE OF TAMIL NADU & ANR.
(Civil Appeal Nos. 5134-5135 of 2002)
APRIL 21, 2009
.B
[DR. ARIJIT PASAYAT AND LOKESHWAR SINGH
PANTA, JJ.]
·'r
Tamil Nadu General Sales Tax Act, 1959 - Sale of wet
. grinders - Levy of sales tax and imposition of penalty - c
Assessee's claim that only parts of wet grinders sold and not
wet grinders - Order of assessing authorities and High Court
that a complete wet grinder was sold which was a new
commodity and not merely parts thereof - Interference with -
Held: Not called for as regards levy of tax - As regards levy D
.. of penalty, certain items not included in the turnover were
disclosed in dealer's own accounts book and assessing
authorities included the items in dealer's turnover and
disallowed exemption, thus, penalty cannot be imposed -
Levy of penalty set aside.
E
State of Tamil Nadu v. Suguna Agencies 1991 (81) STC
33; S. Durai v. Joint Commissioner of Commercial Taxes
Chepauk, Madras (1994) 95 STC 372, referred to.
Case Law Reference:
F
1991 (81) STC 33 Relied on Para 1
1994 (95) STC 372 Relied on Para 1
CIVIL APPELLATE JURISDICATION : Civil Appeal Nos.
5134-5135 of 2002. G
'"*' 1
From the Judgment & Order dated 12.09.2001 of the High
Court of Judicature at Madras in Writ Petition Nos. 6722 to
6723 Of 1999. I
809 H
810 SUPREME COURT REPORTS [2009} 6 S.C.R.
A S. Balaji, N.C. Mohan, Madhusmita Bore and K.V.
Vijayakumar for the Appellant(s).
R. Nedumaran for the Respondent(s).
The Judgment of the Court was delivered by
B
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 petitions filed by the appellant. The appellant
is a dealer registered under the Tamilnadu General Sales Tax
Act, 1959 (in short the 'Act'). The appellant was assessed to
C tax on the sale of wet grinders. Though the appellant claimed
that he was not selling wet grinder but only parts thereon, the
claim was found to be untrue and tax and penalty were imposed
for the Assessment years 1992-93 and 1993-94. Appellant's
stand was that he was entitled to relief on the basis of a
D judgment of the High Court in State of Tamil Nadu v. Suguna
Agencies (1991) 81 SCC 33). According to the Revenue
authorities, the judgment was referred to in a later judgment of
the High Court in S. Durai v. Joint Commissioner of
Commercial Taxes Chepauk, Madras (1994) 95 STC 372
E wtiere a different view was taken.
2. Both these cases are cases in which similar claims were
made that though the assessee had purchased parts required
to be put together to form wet grinder whatsoever has been sold
by the assessee was not wet grinder but parts thereof. In the
F first case the High Court accepted the finding of the Tribunal
that what had been sold was the parts of the wet grinder. In the
later case the High Court found that the authorities had
recorded a finding that what was sold was in fact was a
complete wet grinder which was a new commodity and not
G merely parts thereof. ....
3. The High Court was of the view in the present case that
the later decision apply to the facts of the present case. As
regards the penalty the assessee took the stand that the
H penalty has been imposed mechanically and there was no
SREE KRISHNA ELECTRICALS v. STATE OF TAMIL 811
NADU & ANR. [DR. ARIJIT PASAYAT, J.]
• warrant for it as the assessee had disclosed the turnover for A
.._ which he had claimed exemption. The High Court was of view
that there was not complete disclosure and the fact that he had
disclosed the sale of what he has termed as parts does not
amount to full disclosure. The assessments made in the case
of the assessee were in fact the best judgment assessment B
which permitted the imposition of penalty. Accordingly the writ
petitions were dismissed.
4. Learned counsel for the appellant submitted that the
High Court should have compared the factual scenario and
should have held that the decision in Suguna's case (supra) is c
applicable to the facts of the case.
5. Learned counsel for the respondent on the other hand
supported the judgment of the High Court.
6. We find that the authorities have factually adjudicated
the issues. In S. Durai's case (supra) on which reliance was D
placed by the High Court to dismiss the writ petitions is held
that what was sold was in fact a complete wet grinder which
was a new commodity and not merely parts thereof. The High
Court has observed that the factual scenario was identical. The
conclusions arrived at by the revenue authorities and the High E
Court that in fact what was sold was a complete wet grinder
which was a new commodity and not merely parts thereof. This ·
being a factual finding, there is no scope for interference in
these appeals so far levy of tax is concerned.
7. So far as the question of penalty is concerned the items F
which were not included in the turnover were found incorporated
in the appellant's accounts books. Where certain items which
are not included in the turnover are disclosed in the dealer's
own account books and the assessing authorities includes
these items in the dealers' turnover disallowing the exemption G
, i
penalty cannot be imposed. The penalty levied stands set
aside.
· 8. The appeals are accordingly disposed of.
N.J. Appeals disposed of. H
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "sales tax"Sign in to search