Penalty for incorrect return requires a specific finding that the return was incomplete or wrong

Penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act is attracted only when the return is found to be incorrect or incomplete under section 12(4)(iii). Where the entire turnover was disclosed in the books of account and returns, and no finding was recorded that the return was incorrect or incomplete, the statutory pre-condition for levy was not satisfied. The penalty was therefore not sustainable and was deleted, while the assessment remained undisturbed.

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Issues: Whether penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act could be sustained when the entire turnover was reflected in the books of account and returns, but no finding was recorded that the return was incorrect or incomplete.

Analysis: The penalty provision under section 12(5)(iii) applies only where the return submitted is found to be incorrect or incomplete, as contemplated by section 12(4)(iii). The authorities below accepted that the turnover was disclosed in the books of account and in the returns, and no finding was recorded that the return was incorrect or incomplete. In the absence of that foundational finding, the statutory pre-condition for invoking the penal provision was not satisfied.

Conclusion: The penalty under section 12(5)(iii) was not sustainable and was deleted. The revision succeeded to that extent.

Final Conclusion: The tax case revision was disposed of by setting aside the penalty while leaving the assessment undisturbed.

Ratio Decidendi: Penalty under section 12(5)(iii) cannot be imposed unless there is a finding that the return is incorrect or incomplete, since that finding is a jurisdictional pre-condition to the levy.

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