Judgment :- P.P.S. JANARTHANA RAJA, J. 1. This tax case revision is transferred from the Special Tribunal after its abolition as per Section 3 of the Special Tribunal Repealing Act. 2. The above revision is filed against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, dated 18.2.2003 in T.A.No.126 of 2001 by raising the following substantial question of law: "Whether the Sales Tax Appellate Tribunal is right in holding that penalty is leviable under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 for the assessment year 1994-95 since the taxability or otherwise of sale of REP licence was ultimately settled by the Supreme Court only in the year 1996 in 102 STC 106? 3. The assessee is a dealer in Hides and skins at No.2, Hunters Road, Choolai, Chennai-112. The relevant assessment year is 1994-1995. The assessee was originally assessed to tax on a total and taxable turnover of Rs.1,89,54,948/-and Nil respectively. Later the assessment records were scrutinized and the assessing officer found the turnover relating to sale of Advance REP licence to the tune of Rs.26,39,336/-as escaped assessment. Therefore, he revised the assessment and levied tax on the said escaped turnover on the sale of REP licence and levied penalty of Rs.4,16,950/-under Section 16(2) of the Act. Aggrieved by that order, the assessee has filed an appeal to the Appellate Assistant Commissioner. The said Appellate Assistant Commissioner confirmed the order of levying penalty and dismissed the appeal. As against the said order, the assessee has filed an appeal before the Sales Tax Appellate Tribunal. The Tribunal held that there is no wilful non-disclosure of the turnover relating to the sale of REP licence and allowed the appeal, deleting the penalty. Hence, the present revision. 4. Learned Special Government Pleader appearing for the revenue submitted that the Tribunal is wrong in deleting the penalty under Section 16(2) of the TNGST Act. He further submitted that the Tribunal failed to note that the assessing authority resorted to revision of assessment in view of the fact that the dealers failed to disclose the turnover relating to REP licence. Therefore, the assessing officer has rightly levied penalty under Section 16(2) of the Act for willful non-disclosure of taxable turnover. He further submitted that the Tribunal failed to note that the assessing authority resorted to revision of assessment in view of the fact that the dealers failed to disclose the turnover relating to REP licence. Therefore, the assessing officer has rightly levied penalty under Section 16(2) of the Act for willful non-disclosure of taxable turnover. He also submitted the Tribunal ought to have seen that the dealers did not disclose the taxable turnover of REP licence in the monthly A1 returns for the year 1994-1995 and filed incorrect and incomplete return. He further relied on the decision reported in 94 STC 139, in which the taxability of REP licence was settled and the same was affirmed by the Supreme Court in 102 STC 106. Therefore the assessee ought to have disclosed the turnover relating to REP sales and the order passed by the Tribunal is not in accordance with law and the same has to be set aside. 5. The learned counsel appearing for the respondent/assessee submitted that the Tribunal is correct in deleting the penalty levied on the turnover relating to REP licence. He further submitted that the issue was settled by the Supreme Court only on 01.05.1996 and hence no penalty is leviable. Therefore, the order passed by the Tribunal is in accordance with law and the same has to be confirmed. 6. Heard the learned counsel on either side and perused the materials placed on record. The assessee was assessed to tax on total turnover and taxable turnover at Rs.1,89,54,948/- and Nil respectively. The assessing officer noticed that the turnover relating to sale of REP licence escaped assessment and informed the assessee that the sale of REP licence is kept pending in view of the stay order of the Supreme Court. The Apex Court held that it is taxable in the case of Tvl.Vihar Sales Corp. reported in 102 STC 106. The Supreme Court delivered the judgment only on 1.05.1996. According to the assessing officer, the assessee ought to have filed revised return. Because of the failure on the part of the assessee in not filing the return, the assessing officer levied penalty under Section 16(2) of the Act. It is not in dispute that the assessee reported the turnover relating to REP licence. According to the assessing officer, the assessee ought to have filed revised return. Because of the failure on the part of the assessee in not filing the return, the assessing officer levied penalty under Section 16(2) of the Act. It is not in dispute that the assessee reported the turnover relating to REP licence. It is also to be noted that during the relevant assessment year, this Court in the case of P.S.APPARELS V. DEPUTY COMMERCIAL TAX OFFICER reported in (1994) 94 STC 139 , has held that the sale of REP licence subject to tax. The said judgment has not reached finality. Hence the matter was taken to Supreme Court, in which, the Supreme Court has granted stay. In view of the same, the assessee has claimed exemption on the ground that the matter has not reached finality and the same is pending before the Apex Court. Hence no penalty is leviable till the Supreme Courts judgment. The assessee was under the bona fide belief and claimed exemption. Therefore, it cannot be said that it amounts to willful non-disclosure of turnover, for the purpose of levying penalty under Section 16(2) of the Act. Hence no penalty is leviable till the Supreme Courts judgment. The assessee was under the bona fide belief and claimed exemption. Therefore, it cannot be said that it amounts to willful non-disclosure of turnover, for the purpose of levying penalty under Section 16(2) of the Act. Section 16 (2) of the Act reads as follows:- "Sec. 16(2) In making an assessment under clause (a) of sub-section (1), the assessing authority may, if it is satisfied that the escape from the assessment is due to wilful nondisclosure of assessable turnover by the dealer, direct the dealer, to pay, in addition to the tax assessed under clause (a) of sub-section (1), by way of penalty a sum which shall be-- (a) fifty per cent of the tax due on the turnover that was willfully not disclosed if the tax due on such turnover is not more than ten per cent of the tax paid as per the return; (b) one hundred per cent of the tax due on the turnover that was willfully not disclosed if the tax due on such turnover is more than ten per cent but not more than fifty per cent of the tax paid as per the return; (c) one hundred and fifty per cent of the tax due on the assessable turnover that was wilfully not disclosed, if the tax due on such turnover is more than fifty per cent of the tax paid as per the return; (d) one hundred and fifty per cent of the tax due on the assessable turnover that was wilfully not disclosed, in the case of self-assessment referred to in sub-section (1) of section 12; Provided that no penalty under this sub-section shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition." 7. From a reading of the above, it is clear that for the purpose of levying penalty under Section 16(2), there should be willful non-disclosure of the turnover in the return. In the present case, the turnover was shown, but under the bona fide belief, the assessee claimed exemption. Therefore, the condition precedent for invoking the provision under Section16(2) has not been satisfied. In the case of State of Tamil Nadu v. Sri Shanmughanada & Co. reported in (1997) 104 STC 61 , this Court considered the scope of levying penalty under Section 16(2) of the Act. Therefore, the condition precedent for invoking the provision under Section16(2) has not been satisfied. In the case of State of Tamil Nadu v. Sri Shanmughanada & Co. reported in (1997) 104 STC 61 , this Court considered the scope of levying penalty under Section 16(2) of the Act. The relevant portion of the order reads as under:- "5. In so far as the merits of case, in levying penalty under Section 16(2) of the Act, is concerned, it was represented that the turnover of Rs.1,12,664 was assessed on the basis of book turnover. The assessed turnover was stated to be found in the books of accounts and the accounts were accepted by the department. In such a case, the Appellate Assistant Commissioner pointed out that in view of the decision of the Supreme Court in State of Madras v. S.G. Jayaraj Nadar & Sons (1971) 28 STC 700 penalty is not exigible under Section 16(2) of the Act. This situation was not disputed seriously. Therefore, on merits, penalty under Section 16(2) of the Act is not exigible in the case of the assessee. Under such circumstances, we have no other alternative, but to dismiss the revision filed by the department. Accordingly, the tax case (revision) is dismissed. No costs." 8. Applying the above principle, levying of penalty by the assessing officer under section 16(2) of the Act is not justified. The Tribunal has correctly held that the levy of penalty is not justified and therefore deleted penalty. We do not find any error of law of illegality in the order passed by the Tribunal warranting interference. The finding given by the Tribunal is based on valid materials and evidence and It is a question of fact. It is not a perverse order. Therefore, we confirm the order of the Tribunal and answer the question of law in favour of the assessee and as against the revenue. The appeal filed by the revenue is devoid of merits and the same is dismissed. No costs.