Wilful nondisclosure of taxable turnover justified penalty where disclosure came only after departmental detection.

The Madras HC held that penalty under section 16(2) of the Tamil Nadu General Sales Tax Act was justified where the assessee knew of the tax liability on agency sales but omitted the turnover from the original returns and made disclosure only after departmental investigation detected the suppression. The Tribunal's finding that the later disclosure was not voluntary was treated as a factual conclusion supported by the record. On those facts, the Court accepted that the statutory element of wilful nondisclosure was established, so the penalty was rightly sustained.

---

---

Issues: Whether penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was justified on the footing that the assessee had wilfully failed to disclose agency turnover liable to tax.

Analysis: The Tribunal's finding was that the assessee knew of the tax liability on the agency sales, yet the turnover was not included in the original returns and the supplemental disclosure was made only after the department's investigation had detected the suppression. The Court treated that finding as one of fact supported by material on record, and accepted the inference that the disclosure was not voluntary. On those facts, the element of wilful nondisclosure required for levy of penalty was satisfied.

Conclusion: Penalty under section 16(2) was rightly sustained, and the contention against the levy failed.

---