Best judgment assessment penalty cannot be imposed later in separate proceedings once the assessment is concluded.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 could not be imposed through separate proceedings after a best judgment assessment under section 12 had already been completed. The court noted that, under the pre-amendment statutory scheme, any penalty connected with a best judgment assessment had to be levied at the time the assessment order was made under section 12(2). Once the assessment was concluded without a penalty, the authority lacked jurisdiction to reopen that final assessment by issuing later proceedings solely for penalty. The separate penalty levy was therefore unsustainable, and the assessee's position was upheld.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 could be levied by separate proceedings after the best judgment assessment had already been completed.

Analysis: The assessment proceedings had been completed earlier under section 12 of the Act, and the later notice was issued only for the purpose of levying penalty. The statutory scheme, as understood from the relevant provision and the binding interpretation of the provision prior to its amendment, required any penalty in a best judgment assessment to be imposed at the time the assessment was made under section 12(2). Once the assessment order had been passed without imposing penalty, the authority could not reopen that concluded assessment by initiating independent subsequent proceedings solely to levy penalty.

Conclusion: The separate levy of penalty was without jurisdiction and could not be sustained. The Revenue's challenge failed and the decision in favour of the assessee was upheld.

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