Pre-notice tax payment bars penalty for wilful non-disclosure when the alleged suppressed turnover has already been fully discharged.

Penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 cannot be sustained where the dealer has already paid the entire tax attributable to the alleged suppressed turnover before initiation of revision proceedings. The provision applies only when escape from assessment results from wilful non-disclosure and the tax remains due; once payment is made before notice or revision, the basis for penalty disappears. Treating the corresponding Tamil Nadu General Sales Tax Act provision as in pari materia, the Court applied the earlier ratio that no penalty lies in such circumstances and held the Tribunal was wrong to refuse it. The penalty was therefore deleted.

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Issues: Whether penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 can be sustained when the dealer had already paid the entire tax on the alleged suppressed turnover before initiation of revision proceedings.

Analysis: Penalty under Section 27(3) is attracted only where the escape from assessment is due to wilful non-disclosure of assessable turnover and the tax remains due. Here, the tax was paid at the time of inspection, much before the revision notice and the revised assessment. The Court treated the analogous penalty provision under the Tamil Nadu General Sales Tax Act, 1959 as in pari materia and relied on the principle that where tax is paid before issuance of notice, penalty cannot be levied. The Tribunal's refusal to apply the ratio of the earlier decision was held to be incorrect.

Conclusion: The penalty was unsustainable and stood deleted.

Ratio Decidendi: Where the entire tax attributable to the alleged suppression is paid before initiation of revision or issuance of notice, penalty for wilful non-disclosure cannot be imposed.

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