Bona fide omission in sales tax return did not justify penalty where disclosure rules were introduced later.

Penalty for filing an incorrect or incomplete return under section 12(5) of the Tamil Nadu General Sales Tax Act could not be sustained where purchase turnover taxable under section 7-A was omitted from the return because the prescribed form then contained no specific column for that disclosure and the relevant rule requiring inclusion was introduced only later. The turnover had been disclosed in the books and tax remitted, supporting a bona fide doubt on whether it formed part of total turnover. In those circumstances, the return was not treated as incorrect or incomplete for penalty purposes, and the penalty was held unsustainable.

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Issues: Whether penalty under section 12(5) of the Tamil Nadu General Sales Tax Act, 1959 could be levied for omission to include purchase turnover taxable under section 7-A in the return for the assessment year 1980-81.

Analysis: The return in form A-2 for the relevant assessment year did not contain any specific column for purchase turnover liable to tax under section 7-A. The requirement to include such turnover in the total turnover was introduced only later by amendment to rule 5(1), and a revised return form was prescribed thereafter. The purchase turnover had in fact been disclosed in the books and tax had been remitted. In that setting, the omission was held to arise from a bona fide doubt as to whether such turnover formed part of total turnover, and the return could not be treated as incorrect or incomplete for attracting penalty.

Conclusion: Section 12(5) could not be invoked on the facts, and the penalty was not sustainable against the assessee.

Final Conclusion: The challenge to the deletion of penalty failed, and the dismissal of the tax case left the Tribunal's order undisturbed.

Ratio Decidendi: Penalty for filing an incorrect or incomplete return cannot be imposed where the omission occurred under a bona fide and legally supportable doubt, especially when the applicable return form and governing rule did not then require disclosure in the manner later prescribed.

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