Turnover suppression and penalty: post-notice tax payment does not negate wilful suppression, and penalty must be reconsidered.

Cross-verification of HPCL records showed that the dealer's returns did not disclose the full turnover for the relevant year, and the dealer offered no convincing explanation to rebut suppression. Payment of tax in instalments after notice did not cure the default or displace the inference of willful suppression, so the Tribunal's contrary view was unsustainable. However, because the statutory scheme allowed penalty only up to a prescribed ceiling, the assessing authority could still examine whether bona fide reasons existed for the short disclosure and determine the appropriate extent of penalty. The finding of no willful suppression was set aside and the penalty question was remitted for fresh consideration.

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Issues: Whether the penalty levied for suppression of turnover was rightly interfered with and whether the matter required remand for fresh consideration of the quantum of penalty.

Analysis: The Department established, through cross-verification of HPCL records, that the dealer's returns did not reflect the full turnover for the relevant year. The dealer did not furnish a convincing explanation to displace the inference of suppression, and payment of tax in instalments after notice did not erase the default. The Tribunal's view that there was no willful suppression was therefore unsustainable. At the same time, the statutory scheme permitted imposition of penalty up to a prescribed ceiling, so the assessing authority could still examine whether bona fide reasons existed for the short disclosure and whether penalty should be imposed to the extent warranted.

Conclusion: The finding of no willful suppression was set aside, and the penalty issue was remitted to the Assessing Officer for fresh consideration on the aspect of imposition and quantum of penalty.

Ratio Decidendi: Proof of payment after notice does not by itself negate willful suppression, and where suppression is otherwise established, the authority may still reassess the appropriateness and extent of penalty within the statutory limit on a fresh examination of the dealer's explanation and conduct.

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