M/S. Arul & Co vs State Of T.N. & Anr

The Supreme Court upheld the decision of the Madras High Court regarding the levy of tax, affirming that there was no basis for interference with the tax assessment. However, the Court set aside the penalty imposed on the appellant, referencing the findings in Civil Appeal No. 5134-35 of 2002. The judgment clarifies the distinction between tax liability and penalty imposition, emphasizing that penalties require a different standard of justification.