Wilful non-disclosure is required for sales tax penalty; reassessment alone cannot sustain a mechanical levy.

Penalty under section 16 of the Tamil Nadu General Sales Tax Act, 1959 requires a clear finding of deliberate and wilful non-disclosure of assessable turnover. A reassessment by itself does not establish suppression; the assessment order must record that the turnover existed and was intentionally omitted from disclosure. Because the reassessment order contained no such finding and the penalty appeared to have been levied mechanically, the levy under section 16(2) was set aside in favour of the assessee.

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Issues: Whether penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained in the absence of a clear finding of wilful non-disclosure of assessable turnover.

Analysis: Penalty under section 16 of the Tamil Nadu General Sales Tax Act, 1959 is attracted only when there is a deliberate and wilful non-disclosure of assessable turnover. A reassessment by itself does not establish suppression, and the assessment order must contain a clear finding showing that the turnover existed and was wilfully omitted from disclosure. The reassessment order in this case did not record any such finding, and the levy of penalty was treated as having been imposed mechanically.

Conclusion: The penalty could not be sustained and the levy under section 16(2) was set aside in favour of the assessee.

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