Change of opinion bars later penalty levy where the assessing authority had already declined to impose penalty.

Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 is not sustainable where the assessing authority had already examined the issue during assessment and recorded that penalty was not exigible. A later levy in those circumstances is treated as a mere change of opinion, not a valid reopening of a concluded decision; it may be considered only when the question was left open earlier. The proceedings were also procedurally defective because the assessee was denied an opportunity to inspect seized records and reconcile the entries before penalty was imposed. Prompt payment of tax on the relevant transactions further supported deletion of the penalty.

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Issues: Whether penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 could be levied after the assessing authority had initially decided not to impose penalty, and whether the penalty was otherwise sustainable on the facts.

Analysis: The assessing authority had, at the time of assessment, considered the question of penalty and recorded that penalty was not exigible. In such a situation, a later attempt to levy penalty amounted to a mere change of opinion and not a permissible re-opening of an issue that had already been concluded. The later power to consider penalty could apply where the question had been left open or not considered earlier, but not where a conscious decision had already been taken. The proceedings were also defective because the assessee had sought an opportunity to inspect the seized records and reconcile the entries before penalty was imposed, and that opportunity was not granted. The record also showed that the tax on the relevant transactions had been paid promptly, which reinforced the conclusion that penalty proceedings were not justified.

Conclusion: Penalty under section 12(3) could not validly be imposed in the circumstances, and the penalty was deleted.

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