Penalty under sales tax law needs best judgment assessment or proved suppression; accepted books alone do not justify levy.

Penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 applies only when the assessment is made to the best of judgment on the basis of a non-existent, incomplete, or incorrect return; where turnover is taken from the assessee's books and accepted by the assessing authority, the penal foundation is absent. The text further notes that penalty is not automatic and cannot be sustained merely because additional tax liability is found, unless wilful suppression or a comparable defect in the return is established. On the stated facts, the penalty was deleted and the State's revision failed.

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Issues: Whether penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained when the assessment was based on book turnover and there was no best judgment assessment or suppression.

Analysis: Penalty under Section 12(3)(b) is attracted only where the assessment is made to the best of judgment under Section 12(2) on account of a non-existent, incomplete, or incorrect return. Where the turnover is taken from the assessee's books of account and accepted by the assessing authority, the foundation for invoking the penal provision does not arise. The cited decisions reiterate that the levy is not automatic and that account-based assessment, without material showing wilful suppression, does not justify penalty.

Conclusion: The penalty under Section 12(3)(b) was not sustainable on the facts, and the revision by the State failed.

Final Conclusion: The dismissal of the revision left intact the deletion of penalty and confirmed that penalty cannot be imposed under Section 12(3)(b) merely because a further tax liability is found when the assessment rests on accepted books of account.

Ratio Decidendi: Penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 is not leviable unless the assessment is a best judgment assessment based on an incorrect or incomplete return; where turnover is accepted from the books and no suppression is established, the penalty cannot stand.

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