Suppression of turnover not inferred from inflated quota application where books correctly recorded raw material receipts.

Inflated figures stated in an application to another department did not, by themselves, establish suppression of taxable turnover under the Tamil Nadu General Sales Tax Act, where the books correctly recorded the raw material received and used and the allotments granted were duly accounted for. The exaggeration was used only to seek a higher import quota and was not accepted by the granting authority. Moral impropriety in a separate application was held insufficient to justify reassessment or penalty on a theory of escaped assessment, and concluded assessments could not be reopened on mere suspicion when no material supported suppression.

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Issues: Whether inflated figures stated in an application to another department, while the actual raw material received and accounted for in the books remained correct, justified reassessment and penalty on the footing of suppression and escaped assessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The assessee's books reflected the actual quantity of raw material received and used, and the allotments granted were duly recorded. The exaggerated figures in the quota application were made only to seek a higher import quota and were never accepted by the granting authority. In taxing law, moral impropriety in an application to another department does not by itself establish suppression of taxable turnover. The finding of the Tribunal that there was no suppression was a finding of fact, and no material was shown to justify reopening the concluded assessments merely on suspicion.

Conclusion: Reassessment and penalty were not warranted, and the challenge to the Tribunal's order failed.

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