Wilful suppression is essential for sales tax penalty; reassessment alone cannot sustain quasi-criminal penalty.

Penalty under the Tamil Nadu Value Added Tax Act is quasi-criminal and cannot follow reassessment automatically. It may be imposed only where the assessing authority records a specific finding that the dealer wilfully failed to disclose taxable turnover or suppressed material facts. Where the relevant payment is already reflected in the books and the reassessment order contains no finding of wilful non-disclosure, the jurisdictional basis for penalty is absent. An incorrect statutory reference may be curable, but it does not save a penalty order lacking the required finding. The penalty was therefore not sustainable, while the tax assessment itself remained undisturbed.

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Issues: Whether penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained in the absence of a recorded finding that the escaped turnover resulted from wilful non-disclosure or suppression by the dealer.

Analysis: Penalty under the sales tax regime is treated as quasi-criminal in nature and is not automatic on every reassessment. The statutory scheme of Section 27 distinguishes between reassessment for escaped turnover and penalty, and penalty can be imposed only when the assessing authority records a specific finding that the dealer wilfully failed to disclose taxable turnover. Here, the material payment was reflected in the books of account, and the reassessment order did not contain any finding of wilful suppression or deliberate non-disclosure. The mere fact that the turnover was later brought to tax did not by itself justify penalty. The erroneous reference to Section 27(4) was curable, but the absence of the essential jurisdictional finding was fatal to the penalty.

Conclusion: The penalty could not be sustained and the Tribunal was right in deleting it.

Final Conclusion: The revision failed, and the deletion of penalty was maintained while the tax assessment was left undisturbed.

Ratio Decidendi: Penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 can be imposed only on a recorded finding of wilful non-disclosure of turnover, since such penalty is quasi-criminal and not an automatic consequence of reassessment.

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