JUDGMENT Mrs. Prabha Sridevan J. - The question raised in this case is whether the levy of penalty under section 12(3)(b) is justified or not. The Tribunal had followed the judgment of this court in Indian Metal and Metallurgical Corporation v. State of Tamil Nadu [1978] 41 STC 165 and held that levy of penalty is valid where a claim of exemption by an assessee is disallowed leading to a best judgment assessment. It was contended by the Tribunal that the assessment was not a best judgment assessment and the assessment was based on the books of accounts produced by the assessee. This question is decided by this court in Appollo Saline Pharmaceuticals (P.) Ltd. v. Commercial Tax Officer (FAC) [2002] 125 STC 505 wherein it was held as follows : "7. Though other sub-sections of section 12 were amended by the State Legislature subsequent to the date of the judgment in the case of S.G. Jayaraj Nadar & Sons [1971] 28 STC 700 (SC), section 12(1) and 12(2) has remained in the same form. The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after April 1, 1996 an Explanation has been added below section 12(3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under section 12(3). 8. The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, and not based on any other material and were not estimates, have therefore, to be regarded as assessments made under section 12(1) to which the penal provisions of section 12(3) are not attracted. The levy of penalty for those two assessment years is set aside. 9. The assessing authorities have not applied their mind as to whether in respect of those assessments to which section 12(4) and 12(5) which has since been deleted, would apply, the assessee had failed to disclose any bona fides for not having paid the tax earlier. The levy of penalty for those two assessment years is set aside. 9. The assessing authorities have not applied their mind as to whether in respect of those assessments to which section 12(4) and 12(5) which has since been deleted, would apply, the assessee had failed to disclose any bona fides for not having paid the tax earlier. It is the case of the assessee that the law regarding the taxability of the turnover relating to the bottles was uncertain till this court resolved the matter finally in W.P. No. 120 of 2000 on September 14, 2001 (Appollo Saline Pharmaceuticals (P.) Limited v. Deputy Commercial Tax Officer [2002] 125 STC 500 (Mad)). The earlier judgments of this court had taken the view that the bottles being a distinct commodity and not having been consumed in the manufacture of I.V. fluids, there was a separate sale of the bottles and therefore, section 7A providing for levy of purchase tax was not attracted." In view of the above judgment, the question is answered against the Revenue. The tax case is allowed and the penalty is set aside.