Penalty for wilful suppression requires mens rea; pricing method dispute over entry tax did not justify penalty.

Penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 requires wilful non-disclosure or deliberate suppression of assessable turnover. The court found that the assessee's books disclosed the turnover, and the revision arose from the pricing method of including entry tax paid on purchases in the sale price while claiming set-off. That issue was treated as an accounting method dispute rather than concealment of turnover, and the record did not show mens rea or deliberate evasion. In the absence of a recorded finding of wilful suppression, the statutory precondition for penalty was not met, so penalty was not exigible.

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Issues: Whether penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was leviable on the footing that the assessee had wilfully suppressed taxable turnover by including entry tax in the sale price.

Analysis: Penalty under Section 16(2) is attracted only where escaped assessment is occasioned by wilful non-disclosure or deliberate suppression of assessable turnover. The assessment orders showed that the revision was made because the assessee had included entry tax paid on purchases in the price charged to customers and had claimed set-off in that manner. The books of accounts disclosed the turnover, and the material on record did not establish any deliberate suppression or mens rea. The inclusion of entry tax in the pricing method was treated as an accounting method dispute and not as concealment of turnover. In the absence of a recorded finding of wilful evasion, the precondition for penalty was not satisfied.

Conclusion: Penalty under Section 16(2) was not exigible and the assessee succeeded on the penalty issue.

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