Suppressed turnover and best judgment assessment justify penalty under sales tax law despite no regular accounts or returns.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act was attracted where suppressed turnover was found from undisclosed transactions recovered in a surprise inspection and assessed on a best judgment basis. The dealer's failure to maintain regular accounts or file returns did not negate suppression, because the Tribunal's own acceptance of the estimated suppressed turnover necessarily meant that the turnover had not been disclosed in the statutory records. The cancellation of penalty was therefore inconsistent with those findings and was set aside.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act was attracted where the dealer maintained no regular accounts, did not file returns, and the suppressed turnover was detected from records recovered in a surprise inspection.

Analysis: The assessee, a registered dealer, had not maintained proper books of account or filed returns, and the undisclosed transactions came to light only from records seized in the course of surprise inspection. The Tribunal had itself sustained the estimate of suppressed turnover, which necessarily meant that the turnover had not been disclosed in the regular accounts or returns. Once suppression of turnover was found and best judgment assessment was made on that basis, the statutory requirement for penalty was satisfied. The Tribunal's view that there was no suppression merely because no accounts were maintained was inconsistent with its own findings.

Conclusion: Penalty under section 12(3) was held to be attracted and the order cancelling the penalty was set aside.

Ratio Decidendi: Where suppressed turnover is found and best judgment assessment is made on the basis of undisclosed transactions, penalty under section 12(3) follows notwithstanding the dealer's failure to maintain accounts or file returns.

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