Penalty for disclosed turnover fails where no deliberate evasion or suppression is found in the assessee's own books.

Penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act was unsustainable where the disputed turnover was taken from the assessee's own books and there was no finding of deliberate suppression or intent to evade tax. When the assessing authority merely brings to assessment items already reflected in the dealer's records, the matter does not assume the character of a best judgment assessment for penalty purposes. The absence of material showing lack of bona fides or attempted evasion was decisive, and the penalty was set aside.

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Issues: Whether penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained when the turnover was disclosed from the assessee's own books of account and there was no finding of intention to evade tax.

Analysis: Penalty under the provision was held to be unsustainable where the disputed turnover was found from the dealer's own account books and was not a case of suppression amounting to deliberate evasion. The reasoning followed the principle that, when the assessing authority merely brings to assessment items reflected in the assessee's records, the matter does not assume the character of a best judgment assessment for penalty purposes. The absence of material showing lack of bona fides or an attempt to evade tax was treated as decisive against imposition of penalty.

Conclusion: The levy of penalty under Section 16(2) was held not to be justified and was set aside in favour of the assessee.

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