Penalty for unposted turnover requires wilful non-disclosure, and later disclosure with tax payment defeated levy.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act was not automatic merely because turnover was not posted in the accounts on the date of inspection. Liability depended on proof of wilful omission or wilful non-disclosure. On the facts recorded, the Tribunal accepted the assessee's explanation for the temporary omission, found that the turnover was disclosed in the next month's return, and noted that the tax had been paid before assessment was finalised. Those findings were not shown to be perverse or legally erroneous, so deletion of the penalty was justified.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was leviable for the assessee's non-posting of sales in the accounts on the date of inspection, when the disputed turnover was later disclosed in the monthly return and tax was remitted.

Analysis: The penalty provision was considered in the light of the settled principle that an assessment under section 12(2) does not by itself attract automatic penalty under section 12(3). Levy of penalty depends on whether the assessee was guilty of wilful omission or wilful non-disclosure of the turnover in question. On the facts found, the Tribunal accepted the explanation for the temporary omission, noted that the turnover was subsequently disclosed in the return for the following month, and that the tax due had been paid before finalisation of the assessment. Those findings were not shown to be unreasonable, perverse, or vitiated by any error of law.

Conclusion: Penalty under section 12(3) was not exigible on the facts found, and the deletion of penalty was justified.

Ratio Decidendi: Penalty for escaped or unposted turnover is not automatic and can be sustained only where the assessee's omission amounts to wilful non-disclosure.

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