Wilful non-disclosure is essential for escaped-turnover penalty; bare statutory wording cannot sustain the levy.

Penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 requires a recorded and reasoned finding that escaped turnover arose from wilful non-disclosure. The term "wilful" imports a mental element, so the assessing authority must show deliberate suppression, conscious disregard of the statutory duty, or intention to evade tax; a bare repetition of the statutory language is not enough. Where the materials are drawn from monthly returns and no independent evidence shows intentional avoidance, the penalty cannot be sustained. On the facts stated, the penalty component in the assessment orders was set aside and the assessee succeeded.

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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 specific finding that the escape from assessment was due to wilful non-disclosure of assessable turnover.

Analysis: Penalty under Section 27(3) is attracted only when the assessing authority records satisfaction that the escaped turnover resulted from wilful non-disclosure. The expression "wilful" imports a mental element and requires proof of deliberate conduct, conscious disregard of statutory duty, or intention to evade tax. Mere repetition of the statutory phrase, without independent reasons or evidence showing intentional suppression, is insufficient. On the facts, the materials were gathered from the monthly returns and there was no material to show deliberate suppression or intentional avoidance of tax.

Conclusion: The penalty could not be sustained and was liable to be set aside in favour of the assessee.

Final Conclusion: The writ petitions succeeded and the penalty component in the assessment orders for the relevant years was annulled.

Ratio Decidendi: Penalty for escaped turnover under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 can be imposed only on a recorded and reasoned finding of wilful non-disclosure, which requires proof of intentional suppression or conscious disregard of the statutory obligation.

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