Penalty under return-failure provision not sustainable where the assessee filed returns and paid tax due

Penalty under Section 12(3)(a) of the Tamil Nadu General Sales Tax Act applies only where an assessee fails to file a return. As the assessee had filed the return and paid the tax due, the statutory condition for penalty was not met. The fact that registration and compliance followed departmental inspection was held irrelevant for this provision. The Madras HC therefore held that restoration of the penalty by the Tribunal was unsustainable, allowed the writ petition, and set aside the penalty order.

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Issues: Whether penalty under Section 12(3)(a) of the Tamil Nadu General Sales Tax Act could be sustained when the assessee had filed the return and paid the tax due, though the return followed departmental inspection.

Analysis: Penalty under Section 12(3)(a) is attracted where an assessee does not file any return. The fact that the assessee was not initially registered or that registration and filing followed inspection was held to be irrelevant for this provision. Since the filing of return and payment of tax due were not in dispute, the statutory condition for imposing penalty was not satisfied.

Conclusion: The penalty was not leviable and the restoration of penalty by the Tribunal was unsustainable.

Final Conclusion: The writ petition succeeded and the penalty order was set aside.

Ratio Decidendi: Penalty under Section 12(3)(a) cannot be imposed where the assessee has filed the return and paid the tax due, as the provision applies only to cases of failure to file a return.

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