Penalty on disclosed turnover rejected; fresh works-contract exemption claim refused in revision after assessment went unchallenged.

Penalty under a provision like section 12(3) was held inapplicable where the assessed turnover had been disclosed in the accounts and the assessment was made on book entries rather than best judgment. The revisional authority was justified in declining to entertain a fresh exemption claim based on works contracts when no such plea had been raised before the assessing authority, no appeal had been filed against the assessment, and the assessee had already accepted the turnover for assessment and paid tax on it. The result was that the penalty point favoured the assessee, while the revision point favoured the revenue.

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Issues: (i) Whether penalty could be levied under section 12(3) when the assessed turnover, though not shown in the monthly returns, had been disclosed in the accounts and the assessment was made on book entries; (ii) whether the revisional authority was bound to entertain, on merits, a new claim for exemption on the footing that part of the turnover related to works contracts, notwithstanding the assessee's failure to challenge the assessment earlier.

Issue (i): Whether penalty could be levied under section 12(3) when the assessed turnover, though not shown in the monthly returns, had been disclosed in the accounts and the assessment was made on book entries.

Analysis: The turnover had been reflected in the assessee's accounts and the assessment was not based on best judgment. Section 12(3) was therefore not attracted on the facts found.

Conclusion: Penalty under section 12(3) was not leviable, and the assessee succeeded on this issue.

Issue (ii): Whether the revisional authority was bound to entertain, on merits, a new claim for exemption on the footing that part of the turnover related to works contracts, notwithstanding the assessee's failure to challenge the assessment earlier.

Analysis: The turnover had been offered for assessment by the assessee, tax had been paid on it, no claim of works contracts had been raised before the assessing authority, and no appeal had been filed against the assessment. In those circumstances, the revisional authority was justified in declining to interfere under section 32 and in refusing to reopen the assessment on a new factual basis raised for the first time in revision.

Conclusion: The claim for exemption was not required to be entertained on merits, and the revenue succeeded on this issue.

Final Conclusion: The decision was sustained on the penalty issue but reversed on the deletion of the disputed turnover, resulting in a partial allowance of the revenue's appeal.

Ratio Decidendi: Penalty under a provision like section 12(3) cannot be sustained where the assessment is not founded on best judgment, and revisional relief may be declined where a new factual claim is raised for the first time after the assessee has accepted the assessment without challenge.

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