BATTI FAKRUDDIN SAHEB AND SONS Vs. STATE OF ANDHRA PRADESH
HIGH COURT OF ANDHRA PRADESH
BATTI FAKRUDDIN SAHEB AND SONS
STATE OF ANDHRA PRADESH
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Satyanarayana Raju, J. -
(1.) .This Tax Revision Case raises a question as to the true scope and interpretation of section 14 (2) of the Andhra Pradesh General Sales Tax Act, which reads : "When making an assessment to the best of judgment under sub-section (1) the assessing authority may also direct the dealer to pay in addition to the tax assessed, a penalty not exceeding one and half times the tax due on the turnover that was not disclosed by the dealer in his return."
(2.) It is contended by the learned counsel for the assessee that the turnover referred to in the sub-section means only the actual turnover that was not disclosed and not the estimated turnover. This contention is manifestly unsound. It should be remembered that under section 14, the assessing authority is not compelled to limit the estimate of the turnover tc the transactions which may have been deliberately suppressed. It is open to the assessing authority to make an estimate of the turnover.
(3.) It is reasonable to infer that just as the estimate under section 14 (1) is not limited to the turnover actually proved to have been concealed, the penalty leviable under section 14 (2) can relate to the turnover as finally estimated which need not be confined to the turnover shown to have been concealed. That, in our opinion, is the reasonable construction which ought to be given to the provisions of section 14 (2). If what is contended for by the assessee is correct, then, it would be for the department to show the turnover not actually disclosed, which in the very nature of things is an impossibility. There is no decided case which has construed the provisions of section 14 (2), but a reference to section 28 (1) (c) of the Indian Income-tax Act, which is analogous to the present provision, can safely to be taken as a guide to the interpretation of the provision in question. Section 28 (1) (c) of the Indian Income-tax Act reads : "28. (1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person, (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he or it may direct that such person shall pay by way of penalty-----in the cases referred to in clauses (A) and (c) in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax if any, which would have been avoided if the income as returned by such person had been accepted as the correct income.";
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