Undisclosed turnover detected through investigation can attract penalty where returns and books failed to reveal it.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is sustainable where disputed turnover is not disclosed in monthly returns or in books produced before the assessing authority and is discovered only through investigation. Disclosure made only after a pre-assessment notice does not amount to true disclosure when the turnover was absent from the returns and branch accounts, and the claim that it appeared in head office accounts was not established. On those facts, the turnover would not have come to light without the assessing authority's inquiry, bringing the case within section 12(3) and justifying penalty.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was leviable on the basis that the disputed turnover was not disclosed in the monthly returns or the branch accounts and came to light only through investigation by the assessing authority.

Analysis: The disputed purchase turnover was not included in the monthly returns and was not shown in the books maintained at the branch office that were produced before the assessing authority. The plea that the turnover had been reflected in the head office accounts was not established. The disclosure made only after the pre-assessment notice and investigation did not amount to a true disclosure of the turnover. The facts therefore supported the conclusion that the turnover would not have come to light but for the inquiry made by the assessing authority, bringing the case within section 12(3).

Conclusion: Section 12(3) was rightly invoked and the penalty was justified.

Ratio Decidendi: Where a turnover is not disclosed in the returns or books produced before the assessing authority and is detected only through investigation, penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is sustainable.

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