Escaped turnover cannot be set off against original assessment turnover; penalty follows the sustained suppression.

Escaped turnover proceedings under section 16(1) of the Tamil Nadu General Sales Tax Act, 1959 operate independently of the original assessment under section 12(2); turnover already assessed in the original assessment cannot be set off against turnover later found to have escaped assessment. The Tribunal's reduction of escaped turnover by reference to the earlier assessed turnover was inconsistent with the scheme of section 16 and the distinction between original assessment and reassessment of escaped turnover. Penalty had to be refixed on the higher escaped turnover sustained, because the penalty followed the suppression finally determined.

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Issues: Whether turnover determined in the original assessment under section 12(2) of the Tamil Nadu General Sales Tax Act, 1959 could be deducted from the escaped turnover determined under section 16(1) of the same Act, and whether penalty had to be refixed on the full escaped turnover.

Analysis: The assessment under section 16(1) is confined to turnover that has escaped assessment and operates independently of the original assessment completed under section 12. The escaped turnover proceedings do not reopen or revise the original assessment, and the turnover already assessed cannot be set off against the turnover subsequently found to have escaped assessment. The Tribunal's approach of reducing the escaped turnover by reference to the earlier assessed turnover was therefore inconsistent with the scheme of section 16 and with the settled distinction between original assessment and assessment of escaped turnover. Since the escaped turnover was sustained at the higher figure, the penalty had to follow that sustained suppression.

Conclusion: The set-off allowed by the Tribunal was unsustainable, and the escaped turnover was liable to be fixed at Rs. 6,50,568 with penalty worked out on that basis.

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