Unsupported sales tax deduction and limitation-barred penalty under sales tax law: records and wilful suppression were decisive.

A deduction for sales tax collected from turnover was disallowed where the assessee failed to produce sale invoices, price lists, sales registers, or other supporting records to show that the collection was inclusive of tax and to establish the exact tax component. Penalty under the Tamil Nadu General Sales Tax Act was held unwarranted because the turnover was already reflected in the assessee's own books, there was no material showing wilful suppression or non-disclosure, and the penalty was also found to have been imposed beyond the permissible period. The Tribunal's deletion of penalty was therefore upheld, while the unsupported deduction claim was rejected.

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Issues: (i) whether the deduction claimed towards sales tax collected from total turnover was admissible in the absence of supporting material; and (ii) whether penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was leviable in the facts of the case, including on the ground of wilful non-disclosure and limitation.

Issue (i): whether the deduction claimed towards sales tax collected from total turnover was admissible in the absence of supporting material.

Analysis: The assessee failed to produce the connected sale invoices, price list, sales register, and other material necessary to show that the amount collected was inclusive of tax and to establish the exact tax component. In the absence of such evidence, the assessment treating the disputed collection as part of taxable turnover was sustained.

Conclusion: The claim for deduction was rejected.

Issue (ii): whether penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was leviable in the facts of the case, including on the ground of wilful non-disclosure and limitation.

Analysis: The turnover forming the basis of the assessment was already available in the assessee's own books of accounts, and there was no material to show wilful suppression or non-disclosure. The Tribunal also accepted that the penalty was imposed beyond the permissible period and therefore suffered from limitation. On these grounds, the cancellation of penalty was found to be justified.

Conclusion: Penalty under Section 16(2) was not leviable and the deletion of penalty was upheld.

Final Conclusion: The Tribunal's order was affirmed in full, and the revision filed by the Revenue was dismissed.

Ratio Decidendi: Penalty under the sales tax law cannot be imposed without proof of wilful non-disclosure, and it is also barred if levied beyond the statutory limitation period; a turnover claim unsupported by basic accounting and transactional records may be disallowed.

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