Penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 is not exigible if the assessee has made a bona fide mistake in filing an incorrect or incomplete return.

THANIKKACHALAM, J.

The assessee is the petitioner herein. The assessee is a dealer in tread rubber and rubber chemicals. For the assessment year 1984-85 it reported a taxable turnover of Rs. 41, 751.21 claiming second sale exemption in respect of its sales of chemicals purchased within the State of 5 per cent in the sum of Rs. 3, 75, 368.86 based on the assessment made for the earlier assessment year, in which its claim for second sale exemption in respect of its sale turnover of chemicals was accepted. So also in the assessment year under consideration. The assessing officer issued a notice to the assessee. The assessee filed objection staling that they have not collected sales tax on the sale of chemicals and by mistake they have shown the chemical sale under the exempted turnover column and hence the assessee requested to drop the penalty proceedings. According to the assessing officer the assessee has not shown the commodity of chemicals under the commodity column, in any one of the months from April, 1984 to March, 1985. The assessee has shown only tread rubber. In fact, the assessee is mainly dealing in tread rubber and chemicals only. However, taking into consideration the fact that the assessee has paid the entire tax, surcharge, additional surcharge and additional tax for the sale turnover of chemicals, the assessing officer took a lenient view and levied a penalty of 50 per cent of the tax due on the sale turnover of chemicals under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959. On appeal, the Appellate Assistant Commissioner confirmed the levy of penalty under section 12(5)(iii) of the Act. On further appeal, the Tribunal came to the conclusion that though the filing of incomplete or incorrect return is not wilful or intentional, penalty under section 12(5)(iii) is automatic. Accordingly, the Tribunal confirmed the penalty levied under section 12(5)(iii) of the Act. At the time of hearing, no one was present for the assessee. We have heard the learned Additional Government Pleader (Taxes) and perused the records carefully.

2. The learned Additional Government Pleader (Taxes) submitted that in as much as levy of penalty is automatic under section 12(5)(iii) of the Act, it is not necessary to go into the question whether the filing of the incorrect return by the assessee is due to sufficient cause and therefore reasonable to excuse the delay. According to the learned Additional Government Pleader, when once the assessee filed an incorrect return, the fact that the assessee has paid the entire tax due on the sale turnover of chemicals, would not absolve the assessee from the levy of penalty under section 12(5)(iii) of the Act. The learned Additional Government Pleader (Taxes) further pointed out that a plain reading of the provisions contained in section 12(5)(iii) of the Act would go to show that penalty has got to be levied automatically when the return filed by the assessee is incorrect or incomplete.

3. It remains to be seen that the assessee is a dealer in tread rubber and chemicals only. The assessee has not shown the commodity of chemicals in the commodity column in any one of the months from April 1984 to March, 1985. They have shown only tread rubber. But, according to the assessee, by mistake, they have shown the chemical sale in the exempted turnover column. The assessee stated that they have also not collected the sales tax on the sale of chemicals. According to the assessee, since the mistake occurred in the return form, is a bona fide mistake, in view of the fact that levy of penalty under section 12(5)(iii) of the Act is discretionary, no penalty is necessary under section 12(5)(iii) of the Act. No doubt, it is true that the penalty is exigible under section 12(5)(iii) of the Act if the return filed by the assessee is incomplete or incorrect. Admittedly, A. 1 returns were filed with incorrect particulars (i.e.) the chemical sale was shown in the column provided for "exempted t