Decided on January 19,1970



RAMAPRASADA RAO, J. - (1.) IN this case the State is the petitioner. The assessee secures allotments year after year from the Director of INdustries and Commerce for importing certain raw material for purposes of his business. It is common ground that the accounts of the assessee reflected the correct state of affairs and that on check of such accounts, it was found that he utilised in the course of his trade only the actual quantum of raw material granted by the Director of INdustries and Commerce. But the case of the State now before us is that the assessee, year after year, was applying for a higher quota from the Director of INdustries and Commerce and for this purpose he used to inflate his production in the expectancy that he would be granted a higher quota to import a higher quantum of raw material. It happened invariably that the Director of INdustries and Commerce ultimately granted only less than one-fourth of the quantum applied for and this allotment was regularly and admittedly accounted for in the books of account of the assessee. What happened in the instant case was that the assessments which were originally concluded by the assessing authorities were sought to be revised under section 16 of the Tamil Nadu General Sales Tax Act, 1959, and penalties also were imposed on the ground that the accounts did not reflect properly the production. The conclusion, however, was based upon the application made by the assessee to the Director of INdustries and Commerce showing therein inflated figures of production. As already stated, that was for the purpose of securing a higher quota, if it was possible, from the authorities. It is not disputed before us that the Director of INdustries and Commerce never accepted his application, or the materials furnished in it, but was always granting a considerably lesser quota than for which the assessee applied. But the revenue authorities thought that this was a case of escaped assessment and revised the same and levied penalty as well. The Sales Tax Appellate Tribunal, in our view, rightly came to the conclusion that this case did not disclose suppression and ultimately allowed the appeals.The learned Assistant Government Pleader strongly urges that the character and conduct of the petitioner throws considerable light upon the wanton and deliberate suppression on his part of the assessable turnover. Undoubtedly, the assessee, when he applied to the authorities for the grant of a quota for import of certain raw materials for the purpose of his business, conducted himself in a manner which is not conducive to ethics. But this is purely for a department other than the sales tax department to take notice of and do such things as are necessary in the eye of law. But on that only ground, which is purely on a moral plane, can a taxing authority seek permission to invoke the provisions relating to escapement of assessment and imposition of penalty and penalise the assessee in such circumstances ? We think not. As already stated, the morality and the intention of the assessee does not enter into the field of adjudication in taxing law. If he could by a process which is acceptable in law avoid or evade taxation, he could do so. This is well accepted. Here is a case in which the petitioner applied on false data for a higher quota, but ultimately he could get only the normal allotment. Be that as it may, it is not denied that the assessee utilised only the actual quantum granted by the Director of INdustries and Commerce in his business and such a quantum has been duly accounted for and reflected in his regular books of account maintained by him. That being the conclusion of the Tribunal, which is essentially a question of fact, we are unable to interfere merely on a suspicion on which only the argument rests that the petitioner ought to be penalised on the ground that the accounts are unacceptable and that there has been an escapement of assessment. This is not a case in which section 16(2), or the text of it, warrants a reopening of the concluded or closed assessments on the ground of escapement thereof.No other question of law arises. The tax cases are dismissed.;

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