Wilful non-disclosure test governs sales tax penalty; reassessment alone cannot sustain penalty under the statutory provision.

Penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 can be sustained only where escaped assessment results from wilful non-disclosure of assessable turnover; a reassessment or best judgment estimate by itself does not establish the required mens rea. The use of the word "suppression" may support an inference of deliberate non-disclosure, but the statutory test depends on the actual finding recorded on wilfulness. The Tribunal was therefore not justified in cancelling the penalty merely for want of an express finding. The cancellation of the penalties for the relevant assessment years was set aside and the matter was remitted for fresh disposal in accordance with law.

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Issues: Whether penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained where the assessing authority recorded that the dealer had wilfully suppressed turnover, and whether the Tribunal was justified in cancelling the penalty for want of an express finding of wilful non-disclosure.

Analysis: Section 16(2) authorises penalty only when the escape from assessment is due to wilful non-disclosure of assessable turnover. The existence of a mere reassessment or best judgment estimation is not, by itself, enough; there must be material indicating that the turnover in fact existed and that its non-disclosure was deliberate. The use of the expression "suppression" may support such an inference, but the matter must be examined with reference to the statutory requirement and the actual finding recorded by the assessing authority.

Conclusion: The Tribunal was not justified in cancelling the penalty merely on the ground of absence of a finding. The cancellation of the penalties for the assessment years 1965-66 and 1966-67 was set aside and the matter was remitted for fresh disposal in accordance with law.

Final Conclusion: The penalty issue was reopened for reconsideration on the statutory test of wilful non-disclosure, and the appellate tribunal was directed to decide the matter afresh.

Ratio Decidendi: Penalty for escaped assessment under section 16(2) can be sustained only on a finding of wilful non-disclosure of assessable turnover, and reassessment alone does not establish the requisite mens rea.

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