Penalty for tax disclosure lapse fails without wilful suppression or intent to evade under VAT law.

Penalty under the Tamil Nadu Value Added Tax Act, 2006 was held not sustainable where the turnover was already reflected in the dealer's books of account and there was no specific finding of deliberate concealment, wilful suppression, or intention to evade tax. Non-disclosure in monthly returns and payment of tax during inspection, by themselves, were insufficient to justify penalty under the assessment and escaped-turnover provisions. The penalty was therefore deleted.

---

---

Issues: Whether penalty under the Tamil Nadu Value Added Tax Act, 2006 could be sustained for non-disclosure of turnover in monthly returns and payment of tax during inspection, in the absence of a finding of deliberate intention to evade tax or wilful suppression.

Analysis: The assessment and penalty were founded on the dealer's failure to disclose the turnover in monthly returns and the subsequent payment made during inspection. The governing provisions on penalty were read in the context of assessments under section 22(2) and penalty for escaped turnover under section 27(1)(a) and section 27(3) of the Tamil Nadu Value Added Tax Act, 2006. The Court noted that the turnover was already available from the books of account and there was no specific finding of deliberate concealment, wilful suppression, or intention to evade tax.

Conclusion: Penalty was not sustainable and had to be deleted.

---