Best judgment assessment rule bars penalty under Section 12(3)(b) when turnover is taken from the assessee's accounts.

Penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 is attracted only where the assessment is made on a best judgment basis. The court found that the turnover had been determined substantially from the assessee's own accounts, so the assessment did not rest on best judgment in the statutory sense. The post-amendment position did not alter that material distinction. On those facts, penalty was not leviable, the Revenue's challenge failed, and the deletion of penalty was sustained.

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Issues: Whether penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 was leviable when the assessment was based on the assessee's accounts and not on a best judgment assessment, even after the amendment carried out by Tamil Nadu Act 22 of 2002.

Analysis: The assessment and appellate records showed that the turnover was determined substantially from the accounts furnished by the assessee, with the dispute centred on the availability of penalty under Section 12(3)(b). The governing principle applied was that penalty under the provision is attracted only where the assessment is made to the best of judgment under the statutory scheme. The cited authorities were treated as continuing to apply to the post-amendment position because the material distinction remained whether the assessment was an estimate based on best judgment or one founded on the assessee's books. On the facts found by the authorities below, the assessment did not rest on best judgment in the relevant sense.

Conclusion: Penalty under Section 12(3)(b) was not leviable on the facts of the case, and the challenge by the Revenue failed.

Final Conclusion: The revision was dismissed, and the deletion of penalty was sustained.

Ratio Decidendi: Penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 is attracted only when the assessment is made on best judgment basis and not where the turnover is determined from the assessee's accounts.

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