Penalty under section 12(3) is inapplicable when assessment is made on the assessee's accounts, not by best judgment.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is not attracted where the assessment is completed on the basis of the assessee's accounts under section 12(1) and not by best judgment. The governing distinction is that section 12(3) applies only to the type of assessment contemplated by that provision, while an accounts-based assessment falls outside it. On the facts, the turnover was determined from the books produced by the assessee, so deletion of the penalty was upheld.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 could be levied when the assessment was completed on the basis of the assessee's accounts under section 12(1).

Analysis: The assessment records showed that the turnover was determined from the accounts produced by the assessee and not on a best judgment estimate. The governing principle applied was that penalty under section 12(3) is attracted only where the assessment is of the kind contemplated by that provision, and not where the assessment is made on the accounts furnished by the assessee. The earlier binding decision relied upon by the Tribunal supported this view and also recognized the statutory position for the relevant period.

Conclusion: Penalty under section 12(3) was not exigible on the facts, and the Tribunal was right in deleting it.

Final Conclusion: The revision failed because the only surviving issue was decided against the Revenue, and no substantial question of law arose.

Ratio Decidendi: Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 cannot be imposed where the assessment is made on the basis of the assessee's accounts under section 12(1) and not as a best judgment assessment.

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