Penalty under sales tax law requires wilful suppression; prior tax payment and no deliberate default defeat the levy.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is not automatic and requires proof of wilful nondisclosure or deliberate default. Where the dealer paid tax on the disputed lease charges before the revisional notice and the record showed no intentional suppression or failure to disclose assessable turnover, penalty proceedings could not be sustained. The operative principle is that revisional or escaped-assessment treatment alone does not attract penalty absent culpable conduct; the penalty was therefore liable to be set aside in favour of the assessee.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained when the tax on the disputed turnover had been paid before the show cause notice and there was no wilful nondisclosure of assessable turnover.

Analysis: The petitioner paid the tax on the lease charges before issuance of the revisional notice. The record did not disclose any deliberate suppression, wilful avoidance of disclosure, or intentional failure to pay tax. Penalty proceedings under the sales tax law require a showing that the assessee's default was attributable to culpable conduct and are not attracted merely because assessment is revised or turnover is treated as escaped assessment.

Conclusion: The penalty could not be sustained and was liable to be set aside in favour of the assessee.

Ratio Decidendi: Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is not automatic and cannot be levied absent wilful nondisclosure or deliberate default by the dealer.

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