Penalty for REP licence sales was not automatic where taxability was unsettled and bona fide doubt negated revisional interference.

Penalty under Section 12(5)(iii) of the T.N.G.S.T. Act was not automatic for non-disclosure of sales of REP licences where the taxability of such transactions was then under bona fide doubt. The Tribunal accepted that the assessee acted under a bona fide impression while the legal position remained unsettled, and the High Court found no perversity in that factual conclusion or clear basis to infer mens rea. The later availability of the penal provision from Assessment Year 1992-93 did not require penalty in every case, and no question of law arose for revisional interference. The deletion of penalty was sustained.

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Issues: Whether penalty under Section 12(5)(iii) of the T.N.G.S.T. Act was leviable for Assessment Year 1992-93 on non-disclosure of sales of REP licences, when the taxability of such transactions was then under bona fide doubt.

Analysis: The levy of penalty was held to be discretionary and not automatic. The taxability of REP licence sales had been unsettled during the relevant period, and the Tribunal found that the assessee had acted under a bona fide impression while the legal position was still under dispute. The Court held that the later availability of penal provisions from Assessment Year 1992-93 onwards did not compel imposition of penalty in every case. In the absence of perversity in the Tribunal's appreciation of facts or clear findings establishing mens rea or lack of bona fides, no question of law arose for revisional interference.

Conclusion: Penalty under Section 12(5)(iii) was not held to be automatically attracted, and the deletion of penalty by the Tribunal was sustained.

Ratio Decidendi: Penalty provisions are not mandatory merely because the law permits their invocation from a specified assessment year; their application depends on the facts, including bona fide conduct and the absence of perversity in the fact-finding authority's conclusion.

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