Penalty for defective belated return limited to undisclosed turnover, not entire assessed tax under sales tax law.

Under section 12(3) of the Tamil Nadu General Sales Tax Act, a belated return that is filed but found incomplete or incorrect cannot be treated as a complete failure to submit a return. The provision distinguishes between no return, an incomplete or incorrect return, and a belated defective return, and the penalty clause likewise distinguishes between undisclosed turnover and non-filing. Penalty in such a case is confined to the tax attributable to turnover not disclosed in the return and cannot be computed on the entire tax assessed as if no return had been filed.

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Issues: Whether, under section 12(3) of the Tamil Nadu General Sales Tax Act, penalty in a case where a belated return was filed but rejected as incomplete or incorrect could be levied with reference to the tax assessed, or only with reference to the tax due on the turnover not disclosed in the return.

Analysis: Section 12 treats three situations separately for best judgment assessment: no return, a return that is incomplete or incorrect, and a belated return that is rejected for incompleteness or incorrectness. The penalty clause also makes a distinction between turnover not disclosed in the return and failure to submit a return. A belated return, once filed, cannot be equated with complete failure to submit a return merely because it was late. Where the return is taken into account and rejected as defective, the penalty must be confined to the undisclosed turnover and cannot be computed on the entire tax assessed.

Conclusion: Penalty under section 12(3) was leviable only with reference to the turnover not disclosed by the assessee in the return, not on the basis of the tax assessed as for failure to submit a return.

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