W.P.M.P.No.19895 of 2002 V.Shanmugam v. Tamil Nadurep. By the SecretaryDepartment of (CT) and Religious EndowmentsFort St. George

In the High Court of Judicature at MadrasDated : 25.7.2007Coram :The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice P.P.S.JANARTHANA RAJAW.P.No.14804 of 2002W.P.M.P.No.19895 of 2002 V.Shanmugam... Petitioner Vs. 1.The Tamil Nadu Taxation Special Tribunalrep. By The RegistrarSingaravelar MaligaiChennai 1.2. The State of Tamil Nadurep. By the SecretaryDepartment of (CT) and Religious EndowmentsFort St. George, Chennai 9.3. The Appellate Assistant Commissioner (CT)Vellore.4. The Commercial Tax OfficerThiruvannamalai.... RespondentsPrayer: Writ Petition filed under Article 226 of the Constitution of Indiapraying for the issuance of a Writ of certiorari to call for the recordsof the 4th respondent in R.C.No. B1/2088/98 dated 5.2.1999 and quash thesame.For Appellant :- Mr.D.Naveen Durai Babu For Respondents:-Mr.Haja Nazirudeen Special Govt. Pleader (Taxes) https://hcservices.ecourts.gov.in/hcservices/ ORDER(Order of the Court was made by K.RAVIRAJA PANDIAN, J.)By filing this writ petition, the petitioner challenged the assessmentorder dated 5.2.1999. The petitioner is a Public Works DepartmentContractor carrying on building Contract works. Through the enforcementwing of the respondent department, it was brought to the notice of theassessing officer that the petitioner has constructed building to thePublic Works Department and received the amount for having carried outthe construction of the building for the assessment year 1996-97 in a sumof Rs.7,33,305/-. When the enforcement wing officers approached thepetitioner on 30.9.1997, the petitioner accepted by his statement dated30.9.1997 that the work has been carried out by him and theconsideration for the same has been received. However, he has notproduced any details for the purchase of materials so as to find outwhether the materials purchased by the petitioner has already sufferedtax. The regular assessing officer, the fourth respondent herein calledupon the assessee to produce the books of accounts for the purpose ofcompleting the assessment for the year 1996-97 on more than threeoccasions by issuance of summons one on 18.5.1998, the second on 23.6.1998and the last on 6.8.1998. Though all these summons were duly received bythe petitioner, but the petitioner did not respond to the same.Therefore, the assessing officer proposed to complete the assessment onthe basis of the available materials under Section 3(B) of the TNGST Actafter allowing due exemption as per the provisions of the Act. A noticedated 18.8.1998 containing the proposal was served on the petitioner on9.10.1998. In the meanwhile further details about the construction put upby the petitioner on behalf of Public Works Department during the year1996-97 for the value of Rs.,3,63,581/- has also come to the knowledge ofthe assessing officer. Hence, the assessing officer once again issued arevised pre-assessment notice on 7.12.1998 . The petitioner appearedbefore the assessing officer and admitted that he is not having accountsfor the above construction of the building. He further admitted that hehas effected the purchase of building materials and used the same inthe execution of the building works . The Statement was recorded on30.9.1997. Based on the above materials, including the statement given bythe petitioner and giving details as to the proposal including thepenalty to be levied on the petitioner, a notice dated 19.8.1998 hasbeen issued to the petitioner which has been served on 9.10.1998 andfinalised the assessment by imposing a tax under Section 3B of the TNGSTAct in a sum of Rs. 80,802. The said amount has been arrived at aftergiving 30% deduction as per Section 3B of the TNGST Act, which providesas follows:-Section 3-B Levy of tax on the transfer of goodsinvolved in works contract - (1) Notwithstandinganything contained in sub-sections (2-B), (3), (4), (7)and (8) of Section 3, or section 7-a but subject to theother provisions of this Act including the provisions of https://hcservices.ecourts.gov.in/hcservices/ sub-section (1) of Section 3, every dealer referred toin item (vi) of clause (g) of section (2) shall pay, foreach, year a tax on his taxable turnover of transfer ofproperty in goods involved in the execution of workscontract at the rates mentioned in sub-section (2), (2-A) or (2-C) of section 3, or as the case may be, insection 4.Explanation:- Where any works contract involves morethan one item of work, the rate of tax shall bedetermined separately for each such item of work.(2) The taxable turnover of the dealer of transfer ofproperty involved in the execution of works contractshall on and fro the 26th day of June 1986, be arrived atafter deducting the following amounts from the totalturnover of that dealer :-(a)..............(b)..............(c)..............(d)..............(e)all amounts towards 'labour charges and other likecharges' not involving any transfer of property ingoods, actually incurred in connection with theexecution of works contract, or such amounts calculatedat the rate specified in column (3) of the Table below,if they are not ascertainable from the books of accountsmaintained and produced by a dealer before the assessingauthority.THE TABLESerial numberType of works contractLabour or othercharges as apercentage value ofthe works contract 1Electrical Contracts152All StructuralContracts153Sanitary Contracts254Watch and/or clockrepair contracts505Dyeing contracts506All other contracts 302. Thus from the facts as narrated above, we find no illegality orirregularity in determining the tax payable by the petitioner in theassessment order. In addition to the tax so arrived at the assessingofficer has also levied penalty under Section 12(3)( b)(v) of the Act,which provides that in addition to the tax assessed under sub-section (1) https://hcservices.ecourts.gov.in/hcservices/ or (2) the assessing authority shall in the same order of assessmentpassed under sub-section (1) or (2) or by a separate order, direct thedealer to pay by way of penalty a sum of one hundred and fifty percent ofthe difference of the tax assessed and the tax paid as per the return, ifthe tax paid as per the return, falls short of the tax assessed on thefinal assessment by more than seventy five percent.From the factsnarrated above, we are of the view that clause (v) is not applicable.Section 12(3)(a) provides that where there is failure on the part of thedealer to submit return, the penalty payable is 150% of the tax assessedand the tax paid. Hence the provision quoted can only be stated to benot correct. However, in respect of the amount of penalty imposed, therecannot be any difference. It is also well established legal principlethat wrong quoting of the provision cannot be pleaded. For the foregoingreasons, we do not find any reason to grant the relief as prayed for inthis writ petition. The writ petition is dismissed. Consequently, theconnected W.P.M .P is also dismissed. No costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.Krr/To1. The RegistrarThe Tamil Nadu Taxation Special TribunalSingaravelar MaligaiChennai 1.2. The SecretaryDepartment of (CT) and Religious EndowmentsFort St. George, Chennai 9.3. The Appellate Assistant Commissioner (CT)Vellore.4. The Commercial Tax Officer,Thiruvannamalai.+ 1 CC To Mr. R.Mahadevan, Advocate SR NO.46465+ 1 CC to the Spl. Government Pleader SR NO 46432W.P. No.14804 of 2002bs[co]gp/20.8.