Wilful suppression of turnover justified penalty under sales tax law where the transaction was found to be an outright sale.

Wilful suppression of turnover under the Tamil Nadu General Sales Tax Act justified penalty under section 12(3), because the turnover was disclosed only belatedly and the surrounding circumstances, including delivery instructions and the dealer's account entries, showed an outright sale rather than mere custody or finance. The court also held that the assessee could not rely on an earlier case involving best judgment assessment, since the present assessment was not made on that basis. On these facts, the non-disclosure was treated as deliberate, the Tribunal's cancellation of penalty was set aside, and the penalty imposed by the assessing authority and affirmed on appeal was restored.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was justified on the facts, where the turnover was found to have been wilfully suppressed.

Analysis: The turnover had been disclosed only belatedly, and the surrounding circumstances, including the delivery instructions, the account entries of the Madras dealer, and the absence of any credible basis for the claim of mere custody or finance, showed that the transaction was an outright sale. The Court held that the decision in the earlier case relied on by the assessee did not apply because the present assessment was not a best judgment assessment. On the facts, the non-disclosure was found to be wilful and therefore attracted penalty under section 12(3).

Conclusion: The cancellation of penalty by the Tribunal was set aside and the penalty imposed by the assessing authority, as confirmed by the Appellate Assistant Commissioner, was restored, in favour of the Revenue.

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