Penalty under sales tax law deleted where turnover was recorded in books, wilful suppression was not proved, and delay barred action.

Penalty under section 16(2) of the Tamil Nadu General Sales Tax Act was examined in light of whether the turnover had already been recorded in the assessee's books and whether wilful non-disclosure was proved. The Tribunal held that the department had not established deliberate suppression and that the penalty orders were also made beyond the prescribed five-year period, creating a legal bar. The Madras High Court found no error in that reasoning and declined interference, with the deletion of penalty maintained.

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Issues: Whether penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 was leviable on the assessee.

Analysis: The Tribunal had upheld the assessment but found that the turnover on which penalty was imposed was already reflected in the assessee's books of account and that the department had not established wilful non-disclosure. It also held that the penalties had been imposed belatedly, beyond the prescribed period of five years, and therefore suffered from a legal bar. The High Court found no error in the Tribunal's reasoning on penalty and saw no basis for interference.

Conclusion: Penalty under section 16(2) was not leviable, and the deletion of penalty was upheld.

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