Revised return disclosure limits penalty, but best judgment estimate of undisclosed turnover can still attract penal consequences.

Penalty under section 12(3) could not be levied on turnover later disclosed in a revised return, because the revised disclosure removed that portion from the category of suppressed turnover. However, penalty remained sustainable on turnover independently estimated by the assessing authority in a best judgment assessment, where that estimated cash-sale suppression was still not disclosed in the revised return. The penalty was therefore confined to the undisclosed estimated turnover alone, and restricted to 50 per cent of that amount.

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Issues: Whether penalty under section 12(3) could be levied on turnover later disclosed in a revised return, and whether penalty could still be sustained on turnover estimated by the assessing authority but not disclosed in the return.

Analysis: The assessment was made on best judgment because the dealer had maintained suppressed accounts and only later filed a revised return. On the facts, the turnover actually disclosed in the revised return could not justify penalty merely because it had been omitted earlier. However, the assessing authority had also made an independent estimate of probable cash-sale suppression in the oil transactions, and that estimated amount was not included in the revised return. That portion remained undisclosed even after the revised return and therefore continued to attract penal consequences.

Conclusion: Penalty was not sustainable on the turnover voluntarily disclosed in the revised return, but it was sustainable on the estimated undisclosed turnover of Rs. 1,18,375. The penalty was confined to 50 per cent of that amount.

Final Conclusion: The order of the lower authorities was modified by restricting the penalty to the undisclosed estimated turnover alone, with the revision succeeding only to that limited extent.

Ratio Decidendi: Where suppressed turnover is subsequently disclosed in a revised return, penalty cannot be levied on that disclosed portion, but penalty remains leviable on turnover that was not disclosed and is independently estimated in a best judgment assessment.

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