Willful suppression is essential for VAT penalty; absence of a specific finding led to remand for fresh consideration.

Penalty under the Tamil Nadu Value Added Tax Act, 2006 cannot be sustained unless the authority records a specific finding that the alleged suppression was willful and deliberate. Although unaccounted sale invoices were noticed during inspection and tax was paid at that time, the impugned order confirmed penalty without an independent finding on mens rea. The High Court held that such a finding was necessary before penalty could be fastened, and the factual dispute regarding the nature of the transaction was left to the assessing authority. The penalty order was set aside and the matter remitted for fresh consideration after hearing the assessee.

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Issues: Whether the penalty imposed under the Tamil Nadu Value Added Tax Act, 2006 could be sustained in the absence of a specific finding that the alleged suppression was willful and deliberate.

Analysis: The original assessment had been completed under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006, and the dispute arose from an inspection in which unaccounted sale invoices were noticed and tax was paid at the time of inspection. The impugned order, however, proceeded to confirm penalty without recording an independent finding on whether the omission was willful or deliberate. In penalty proceedings, such a conclusion is necessary before liability can be fastened, and the rival factual claim regarding the nature of the transaction was left for the assessing authority to examine.

Conclusion: The penalty order could not be sustained and the matter was remitted to the Assessing Officer for fresh consideration after hearing the petitioner.

Ratio Decidendi: Penalty for suppression cannot be upheld unless the authority records a specific finding that the suppression was willful and deliberate.

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