Penalty for suppressed turnover upheld where sales were omitted from returns despite being recorded in books of account.

Penalty for suppression of turnover under the Haryana Value Added Tax Act, 2003 was upheld where sales were omitted from quarterly returns and assessment proceedings, even though the transactions appeared in the books of account. The court reasoned that the returns were false in a material particular, and Section 38 permits penalty where a dealer files false or incorrect returns or maintains false or incorrect accounts to suppress sales, after hearing. The dealer's liability was not avoided by saying an authorised representative caused the omission, and retention of tax collected from the purchaser supported the finding of suppression.

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Issues: Whether penalty for suppression of turnover under the Haryana Value Added Tax Act, 2003 could be sustained when the sales were reflected in the books of account but were omitted from the quarterly returns and from the assessment proceedings.

Analysis: The statutory scheme treats duly filed and complete returns as deemed assessment, while selected cases may be scrutinised through notice and assessment under Section 15. Where a dealer furnishes false or incorrect returns, or maintains false or incorrect accounts with a view to suppress sales, Section 38 authorises penalty after opportunity of hearing. The omission of the turnover from the returns and from the assessment proceedings was not cured by the fact that the transactions appeared in the books of account, because the returns were false in a material particular and the tax collected from the purchaser was retained. The explanation that an authorised representative caused the omission did not negate the dealer's liability.

Conclusion: Penalty was validly sustained against the assessee.

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