Judgment :- DR. A. S. ANAND, C.J. Aggrieved by the deletion of penalty levied under section12(3) of the Tamil Nadu General Sales Tax Act, 1959, hereinafter called "the Act", by the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, the Revenue is in revision before us. 2. It is found that the place of business of the respondent-assessee was inspected by the officers of the Enforcement Owing on 22nd of November, 1979, when one pocket note book and 25 empty covers were secured from the place of business. Scrutiny of the records so recovered disclosed certain entries in the pocket note book which had not been included in the turnover to the extent of Rs. 58, 110. The assessee admitted that the amounts reflected in the note book to the extent of Rs. 58, 110 had been received by the assessee but its case was that the same were received from the buyers as premium and were not a part of the sale price. The note book had reflected different premiums collected per barrel for the period April, 1979 to 22nd of November, 1979. The assessing authority, after taking into account the entries in the pocket note book and the empty covers estimated that the amount collected by way of premium by the assessee would have worked out to Rs. 1, 47, 430. The assessing authority, therefore, rejected the returns, and finding the accounts to be incorrect, took recourse to the best judgment assessment and to the taxable turnover as per the accounts an amount of Rs. 1, 47, 430 was added on account of suppression of sales and the total and taxable turnover was thus worked out. The assessing authority also found that the omission to account for the premium receipts of Rs. 1, 47, 430 and not to disclose the same to the department was wilful and deliberate and it, therefore, proposed to levy a penalty of Rs. 19, 239 under section12(3) of the Act. Pre-assessment notice was issued and objections invited, and after hearing the parties, the assessing authority found that the addition of Rs. 1, 47, 430 was based on clear proof, and accordingly the addition was made to the taxable turnover and a penalty under section12(3) of the Act calculated at Rs. 19, 239 was levied. The assessee went up in appeal before the Appellate Assistant Commissioner. 1, 47, 430 was based on clear proof, and accordingly the addition was made to the taxable turnover and a penalty under section12(3) of the Act calculated at Rs. 19, 239 was levied. The assessee went up in appeal before the Appellate Assistant Commissioner. Various pleas were raised, but for the purpose of this case we are concerned with the plea relating to the addition of Rs. 1, 47, 430 on account of the alleged suppression and the levy of penalty of Rs. 19, 239. 3. The Appellate Assistant Commissioner noticed that the assessing authority had calculated the total number of barrels of sodium silicate sold by the assessee as 2, 104 and estimated the suppression at Rs. 1, 47, 430. The Appellate Assistant Commissioner also noticed that at the time of inspection, various records were recovered and the officers had verified those records and found that the amount noticed in the covers were also reflected in the pocket note book marked as "J". On the basis of the entries in the pocket note book "anamath entries" a suppression of only Rs. 58, 110 was calculated. It was found by the Appellate Assistant Commissioner that neither the Enforcement Wing Officer nor the assessing authority had gathered any material to show that the assessee had collected premium for sales, other than those which were found entered in the pocket note book. The Appellate Assistant Commissioner therefore concluded that it was not possible to presume that in all cases goods had been sold only at one rate to all the customers after receiving premium. Accordingly finding that the addition of Rs. 1, 47, 430 was based on surmises and suspicion, the Appellate Assistant Commissioner sustained the addition to the extent of Rs. 58, 110, which alone was available on the basis of the calculation of the actual amount found to have been received by the assessee from the pocket note book. Addition of Rs. 58, 110 only was held liable to tax at 8 per cent. 4. So far as the levy of penalty under section12(3) of the Act is concerned, the assessing authority had levied a penalty of Rs. 19, 239. The Appellate Assistant Commissioner noticed that the penalty had been levied after taking the actual turnover and adding to it the estimated turnover. 4. So far as the levy of penalty under section12(3) of the Act is concerned, the assessing authority had levied a penalty of Rs. 19, 239. The Appellate Assistant Commissioner noticed that the penalty had been levied after taking the actual turnover and adding to it the estimated turnover. According to the Appellate Assistant Commissioner the practice of the department had been to levy penalty only on the actual suppressed turnover and, therefore, he came to the conclusion that since a sum of Rs. 58, 110 represented the difference in price not included in the sale bills and in the accounts, there had been thus a wilful suppression of this amount in the return submitted by the assessee, the suppression of Rs. 58, 110 alone would attract levy of penalty. The tax at 8 per cent was worked out at Rs. 4, 648 and the penalty after rounding of the figures was levied at Rs. 5, 000. 5. The assessee questioned the addition of Rs. 58, 110 to the taxable turnover as also the levy of penalty under section 12(3) of the Act at Rs. 5, 000. The Tribunal found that the suppression of Rs. 58, 110 by the assessee based on the entries in the pocket note book stood amply established and that there was no cause made out for interference with that addition. However, the Tribunal was of the view that penalty of Rs. 5, 000 under section12(3) of the Act was not called for, and consequently it deleted the penalty. 6. On behalf of the Revenue it has been submitted by the learned Government Advocate that since the suppression was noticed and the Tribunal had upheld the finding relating to suppression based on the entries found in the pocket note book to the extent of Rs. 58, 110, the Tribunal was not justified in deleting the penalty levied under section12(3) of the Act. 7. Mrs. Chitra Venkataraman appearing for the assessee-respondent on the other hand contended that the levy of penalty under section12(3) of the Act is not an automatic exercise whenever recourse is taken to the best of judgment assessment under section12(2) of the Act and that since the assessee had rendered an explanation with regard to the entries relating to Rs. 7. Mrs. Chitra Venkataraman appearing for the assessee-respondent on the other hand contended that the levy of penalty under section12(3) of the Act is not an automatic exercise whenever recourse is taken to the best of judgment assessment under section12(2) of the Act and that since the assessee had rendered an explanation with regard to the entries relating to Rs. 58, 110, as found in the pocket note book, it could not be said that there was any intention on the part of the assessee to suppress the turnover. 8. We have given our anxious consideration to the respective contentions raised at the bar and have perused the records. There is no dispute so far as the facts are concerned. The pocket note book recovered from the business premises of the assessee during inspection did contain entries showing the receipt of premium by the assessee for the sale of goods to the tune of Rs. 58, 110. The case of the assessee throughout has been that the receipt of premium by the assessee, which was reflected in the pocket note book, was not a part of the sale price and, therefore, it was not required to be included in the taxable turnover of the assessee. That plea, of course, failed and in our opinion, rightly. The question, however, arises with regard to the levy of penalty under section12(3) of the Act. Section 12(3) of the Act provides that in addition to the tax assessed under sub-section (2), the assessing authority may, in the same order of assessment passed under sub-section (2) or by a separate order direct the dealer to pay by way of penalty the amounts mentioned in clause (a) or (b) of the section. Recourse of section 12(2) is made, inter alia, when no return is submitted by the dealer under sub-section (1) within the prescribed period or where the return submitted by him appears to the assessing authority to be incomplete or incorrect, and the assessing authority, after making an enquiry proceeds to assess the assessee to the best of its judgment, after giving a reasonable opportunity of proving the correctness or completeness of accounts/return submitted by the assessee to the concerned assessing officer.It would thus be seen that under sub-section (3) of section 12 a discretion has been conferred on the assessing authority in the matter of levy of penalty. Levy of penalty under sub-section (3) of section 12 is not automatic whenever recourse is had to the best of judgment assessment under section12(2) of the Act. The discretion, of course, has to be judiciously and properly exercised keeping in view the facts and circumstances of each case. In State of Tamil Nadu v. Thangadurai 1983 (52) STC 279 (Mad.), it has been laid down that merely because the assessment is a best judgment assessment the levy of penalty is not automatic. The Bench went on to observe that the considerations to be taken in connection with assessment are different from the considerations which have to weigh in the matter of penalty. The Bench then opined that in the matter of levy of penalty the fact that the assessee is not able to explain certain documents will not ipso facto lead to the conclusion that the assessee had wilfully suppressed the turnover. 9. In the instant case it is found that he incriminating documents recovered at the time of inspection and the account books were tallied and verified by the officers as well as the representative of the State before the Appellate Assistant Commissioner. It was found that the entries in the pocket note book tallied with the entries in the account book except for the omission of the entries amounting to Rs. 58, 110, which reflected the amount received by the assessee by way of premiums for the sale of the goods. The assessee did not dispute that the amount had been received. The assessee did not even dispute the entries made in the pocket note book. The case of the assessee was that the amount of premiums collected by it were for priority supplies of goods and would not form part and parcel of the sale amount. The plea of the assessee was not accepted by the statutory authorities including the Tribunal. But the explanation of the assessee cannot be ignored while considering the exercise of discretion by the Tribunal for deleting the penalty levied under section12(3) of the Act. The explanation which did not find favour could have been based on a mistaken notion that premium is not required to be included in the sale price. But the explanation of the assessee cannot be ignored while considering the exercise of discretion by the Tribunal for deleting the penalty levied under section12(3) of the Act. The explanation which did not find favour could have been based on a mistaken notion that premium is not required to be included in the sale price. The Tribunal, after a detailed discussion with regard to the levy of penalty observed : "In the circumstances of the case were feel that this is not a case for levying penalty and the penalties levied under Tamil Nadu General Sales Tax and Tamil Nadu Additional Sales Tax Acts are set aside, and the turnover refixed by the Appellate Assistant Commissioner is confirmed." We find from the order of the Tribunal that nothing irrelevant was taken into consideration nor anything relevant left out while deleting the penalty. The mere non-acceptability of an explanation of an assessee with regard to certain entries cannot ipso facto lead to a conclusion that the assessee had wilfully suppressed the turnover. But be that as it may, since the Tribunal did not find any wilful suppression on the part of the assessee to disclose the turnover, the exercise of discretion cannot be said to be perverse or non-judicious as to call for interference in exercise of the revisional powers of this Court. From the facts and circumstances of the case, we are satisfied that the Tribunal exercised the discretion properly and judiciously, in the peculiar fats and circumstances of the case. We therefore do not find any reason to interfere with the order of the Tribunal. The revision fails and is dismissed but we make no order as to costs.