Escaped assessment survives wrong statutory citation, but penalty fails without a finding of wilful non-disclosure.

An assessment for escaped turnover was sustained under section 16 of the Madras General Sales Tax Act, 1959, even though the order referred to section 12(2), because the assessing authority otherwise had jurisdiction and a wrong statutory citation did not invalidate the assessment. The penalty, however, could not stand because escaped-assessment penalty required a specific finding of wilful non-disclosure of assessable turnover, and no such finding was recorded in the assessment orders. The tax assessment was upheld, but the penalty was quashed.

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Issues: (i) Whether an assessment made under section 12(2) of the Madras General Sales Tax Act, 1959, could be sustained as one under section 16 when no return had been filed. (ii) Whether penalty could be levied in the absence of a specific finding of wilful non-disclosure of assessable turnover.

Issue (i): Whether an assessment made under section 12(2) of the Madras General Sales Tax Act, 1959, could be sustained as one under section 16 when no return had been filed.

Analysis: The absence of a return brought the case within escaped assessment. The power to assess escaped turnover under section 16 and the power to make best judgment assessment under section 12 were treated as substantially the same machinery, differing only as to limitation and the statutory requirement connected with penalty. A mere reference to the wrong provision did not invalidate the assessment where the authority otherwise had jurisdiction to assess the turnover.

Conclusion: The assessment orders were validly sustained as orders under section 16 notwithstanding the reference to section 12(2).

Issue (ii): Whether penalty could be levied in the absence of a specific finding of wilful non-disclosure of assessable turnover.

Analysis: Penalty under the escaped-assessment provision was discretionary and required a specific finding that the dealer had wilfully failed to disclose assessable turnover. No such finding had been recorded in the assessment orders. In the absence of that foundational finding, the levy of penalty could not stand.

Conclusion: The penalty was not sustainable and was set aside.

Final Conclusion: The assessment on tax was upheld, but the penalty component was quashed, leaving the result partly in favour of the assessee.

Ratio Decidendi: Where the assessing authority has jurisdiction to tax escaped turnover, an assessment is not invalid merely because it cites the wrong provision, but penalty for escaped assessment cannot be imposed without a specific finding of wilful non-disclosure.

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