Wilful non-disclosure and bona fide claim of exemption defeated sales tax penalty on disclosed REP licence turnover.

Penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was not leviable because the statutory condition of wilful non-disclosure of assessable turnover was not met. The turnover relating to sale of REP licence had been disclosed, and the assessee's claim of exemption was made on a bona fide belief that the issue had not attained finality while it remained pending before the Supreme Court. On those facts, the Tribunal's finding that penalty was unwarranted was neither perverse nor illegal, and the assessee's position was upheld.

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Issues: Whether penalty was leviable under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 for alleged non-disclosure of turnover relating to sale of REP licence for the assessment year 1994-95.

Analysis: Penalty under section 16(2) can be imposed only where the escape from assessment is due to wilful non-disclosure of assessable turnover. Here, the turnover relating to REP licence was disclosed, though the assessee claimed exemption on the bona fide belief that the issue had not attained finality because the matter was pending before the Supreme Court. The statutory condition precedent for invoking penalty was therefore not satisfied. The Court also noted that the levy of penalty was not justified on the facts found by the Tribunal and that the finding was neither perverse nor illegal.

Conclusion: Penalty under section 16(2) was not leviable, and the finding in favour of the assessee was upheld.

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