Wilful suppression needed for turnover penalty; discrepancy from own books and prior tax payment defeated penalty.

Penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 requires proof of wilful failure to disclose assessable turnover with an intention to evade tax, not mere non-disclosure. Where the turnover difference is traced to the assessee's own books and returns, and the revenue does not dispute that the discrepancy arises from those records, the element of wilful suppression is absent. Payment of tax before the revision notices further weakens the basis for penalty. On that reasoning, restoration of the penalty was unsustainable, and the deletion of penalty by the Appellate Deputy Commissioner was restored in favour of the assessee.

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Issues: Whether penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained in the absence of a finding of wilful failure to disclose assessable turnover, when the alleged difference in turnover was traced from the assessee's own books and the tax had already been paid.

Analysis: Penalty under Section 27(3) requires more than mere non-disclosure; the authority must establish a wilful failure to disclose assessable turnover with an intention to evade tax. The alleged discrepancy was derived from the assessee's own records and returns, and the revenue did not dispute that the difference emerged from the books of account. In such circumstances, the element of wilful suppression was absent. The tax had also been paid before the revision notices, which further undermined the basis for penalty.

Conclusion: The restoration of penalty was unsustainable and was set aside; the deletion of penalty by the Appellate Deputy Commissioner was restored, in favour of the assessee.

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