Penalty for undisclosed sales turnover upheld where intermediary claim lacked evidence and omission was not bona fide.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act was upheld where calendar sales turnover was found in the accounts but was not disclosed in the books or returns for the relevant assessment year. The assessee's claim that it acted only as an intermediary and remitted collections to a third party failed because no supporting evidence showed such remittance or any bona fide basis for the omission. The Tribunal's cancellation of penalty was therefore unsustainable, and the earlier intermediary-dealer ruling was held inapplicable on materially different facts. The assessee was held liable for the penalty.

---

---

Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was rightly imposed for non-disclosure of calendar sales turnover in the books of account and returns.

Analysis: The undisclosed calendar turnover was found in the accounts, and the assessee did not disclose the sale value either in the accounts or in the returns for the relevant assessment year. The explanation that the assessee acted merely as an intermediary and remitted the collections to a third party was not supported by evidence. In the absence of materials showing remittance of the collected amounts or any bona fide basis for the omission, the Tribunal's view cancelling the penalty could not be sustained. The reliance placed on the earlier intermediary-dealer decision was held to be inapplicable because the facts were materially different.

Conclusion: The penalty under section 12(3) was justified, and the assessee was held liable.

---