Wilful non-disclosure and escaped turnover justified statutory penalty, and the penalty rate could not be reduced.

Where contemporaneous returns, inspection findings and an unretracted admission showed sales suppression and escaped turnover, the Madras HC upheld penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 for wilful non-disclosure. The Court treated the absence of stock, the mismatch between purchases and sales, and the Accounts Officer's statement as sufficient proof that tax had escaped assessment. It also held that the statutory penalty rate under Section 27(3) did not confer discretion on the Court to reduce the prescribed penalty.

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Issues: Whether the levy of penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 was valid on the facts found, and whether the rate of penalty could be reduced by the Court.

Analysis: The monthly returns showed purchases of 2060 MT and sales of 1464 MT, leaving an apparent balance of 596 MT, but no stock was found during inspection. The statement of the Accounts Officer admitted the sales suppression and the tax due was paid, and the statement was never retracted. On those facts, the turnover had escaped assessment and the escape was due to wilful non-disclosure. The authorities relied upon by the assessee arose under a different statutory regime and on materially different facts involving equal time addition, so they did not assist the assessee. The penalty provision under Section 27(3) did not confer discretion to reduce the statutory rate.

Conclusion: The levy of penalty under Section 27(3)(c) was upheld and the request for reduction of penalty failed.

Ratio Decidendi: Where escaped turnover is established by contemporaneous returns, inspection results, and an unretracted admission of suppression, penalty for wilful non-disclosure follows under the statute and the prescribed rate cannot be altered on discretion.

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