Penalty on delayed and revised sales tax returns falls where delay is explained and omission is rectified before assessment.

Penalty for delayed monthly returns was treated as unsustainable where the assessee gave a satisfactory explanation for the late filing, including disruption caused by agitation, bandh and transport strike. Penalty for an incorrect return was also held not to survive where the assessee filed a revised return before completion of assessment and thereby rectified the omission. The article notes that once the revised return was available for consideration, the basis for penalty under the sales tax provisions disappeared, and both deletions were upheld in favour of the assessee.

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Issues: (i) Whether penalty under section 12(5)(ii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable for delay in filing the monthly returns. (ii) Whether penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable when the assessee had filed a revised return before completion of assessment.

Issue (i): Whether penalty under section 12(5)(ii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable for delay in filing the monthly returns.

Analysis: The delay was explained by the assessee as having been caused by agitation by agriculturists in Maharashtra, a State bandh, and a strike in the Transport Department. The explanation was accepted as sufficient to account for the belated filing of the monthly returns.

Conclusion: Penalty under section 12(5)(ii) was not exigible and its deletion was upheld, in favour of the assessee.

Issue (ii): Whether penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable when the assessee had filed a revised return before completion of assessment.

Analysis: The assessee filed a revised return before completion of assessment, rectifying the omission in the original return. The revised return ought to have been considered, and the failure to do so meant that the basis for penalty did not survive.

Conclusion: Penalty under section 12(5)(iii) was not exigible and its cancellation was upheld, in favour of the assessee.

Final Conclusion: Both penalties having been rightly deleted, the revision failed and the assessee succeeded on all substantial issues.

Ratio Decidendi: Penalty for delayed or incorrect return filing is not sustainable where the delay is satisfactorily explained or where a revised return is filed before completion of assessment and the omission is thereby rectified.

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