Penalty for omitted sales turnover not leviable where the books disclosed the transactions and no suppression was proved.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act was not leviable where the disputed turnover was recorded in the books of accounts and no suppression from the accounts was found. The governing principle under section 12(3)(b) is that penalty applies only when the assessment is based on an incorrect or incomplete return in the manner contemplated by the provision, and turnover already available in the books must be excluded under the later explanation. As the department had access to the recorded transactions and concealment from the accounts was not established, the revision failed and the assessee succeeded.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was leviable when the turnover was reflected in the books of accounts but was not disclosed in the monthly returns.

Analysis: The assessment record showed that the disputed turnover was available in the books of accounts and the appellate authority had specifically found that there was no suppression in the accounts. The governing principle under section 12(3)(b) is that penalty is attracted only where the assessment proceeds on the basis of incorrect or incomplete return in the manner contemplated by the provision, and the later explanation to the provision also requires exclusion of turnover already available in the books of accounts. On the facts, the omission in the returns did not justify treating the turnover as concealed when the department had access to the recorded transactions and no specific concealment from the accounts was established.

Conclusion: Penalty under section 12(3) was not leviable; the revision was liable to fail, in favour of the assessee.

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