Penalty for disclosed turnover fails where books of account show no suppression and bona fide belief is established.

Penalty under the Tamil Nadu General Sales Tax Act, 1959 was considered unsustainable where the turnover was already reflected in the books of accounts and the revenue failed to establish concealment or suppression. The scheme of Section 12(3)(b) applies to assessments based on incorrect or incomplete returns, but not where the assessment is drawn from accepted account books rather than a best judgment estimate. The explanation to Section 12(3)(b) also supported exclusion of disclosed turnover, and a bona fide belief further negatived penal liability.

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Issues: Whether penalty could be sustained under the Tamil Nadu General Sales Tax Act, 1959 when the turnover was recorded in the books of accounts and there was no suppression.

Analysis: The turnover assessed was drawn from the books of accounts and the revenue did not establish any concealment or suppression. The statutory scheme under Section 12(3)(b) permits penalty in the context of an assessment based on an incorrect or incomplete return, but the authorities relied on made it clear that where the assessment is based on accepted account books and not on an estimated best judgment basis, penalty is not attracted. The explanation to Section 12(3)(b) also supports exclusion of turnover reflected in the accounts, and the finding of bona fide belief further negatives penal liability.

Conclusion: Penalty was not leviable on the facts, and the revision was dismissed.

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