Example

Determine penalty if the taxable person has maintained duplicate bill book bearing bill no.1502 showing sale of Rs 2000 in return however the actual sales in original bill 1502 was Rs 2 lakh. Further the taxable person tampers/ destroys actual bill 1502 of Rs 2 lakh to overcome any forth complication.

Answer

As per section 122(2) Any registered person who supplies any goods or services or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilized

(a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or ten per cent. of the tax due from such person, whichever is higher

(b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty equal to ten thousand rupees or the tax due from such person, whichever is higher

It is a case of willful suppression/ misstatement of facts under section 122(2).Therefore penalty = 10,000 or tax due whichever is higher.