Best judgment assessment outside section 12(4) cannot trigger penalty under section 12(5) of the sales tax law.

Penalty under section 12(5) of the Tamil Nadu General Sales Tax Act was not leviable where the assessing authority rejected the return and books of account and completed the assessment by best judgment. Section 12(4) applies to failure to file a return in time, non-filing, or filing an incomplete or incorrect return, and contemplates assessment on the dealer's accounts. Because the assessment in question was made de hors the accounts and was not an assessment under section 12(4), the precondition for penalty under section 12(5) was absent. The Tribunal's finding was therefore correct.

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Issues: Whether penalty under section 12(5) of the Tamil Nadu General Sales Tax Act, 1959 could be levied when the assessment was not made under section 12(4) but was made as a best judgment assessment after rejecting the assessee's accounts and return.

Analysis: Section 12(4) applies where a dealer fails to file the prescribed return in time, fails to file it at all, or files an incomplete or incorrect return, and the assessment is then made on the basis of the dealer's accounts. Section 12(5) is attracted only when the assessment is made under section 12(4). In the present case, the assessing authority rejected both the return and the books of account and completed the assessment by best judgment, de hors the accounts. Such an assessment could not be treated as one under section 12(4).

Conclusion: Penalty under section 12(5) was not leviable, and the finding of the Tribunal was correct.

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