JAWAHARLAL RAMCHARAN Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THIS is a reference made by the Sales Tax Appellate Tribunal (Board of Revenue) at the instance of the assessee. The period of assessment is from 15th November, 1963, to 3rd November, 1964. The assessee filed first quarterly return for this period one day late showing the turnover of Rs. 1,25,200. The assessee's shop was inspected by the Sales Tax Inspector on 17th November, 1964. The inspection showed that the total turnover for the first quarter amounted to about Rs. 3,26,000. The assessee deposited Rs. 20,000 as the amount of tax on the excess turnover on 18th November, 1964 and submitted a revised return on 30th November, 1964, giving the correct figure of the turnover as detected by the Inspector. The Sales Tax Officer completed the assessment by his order dated 28th February, 1966. By the same order, a penalty of Rs. 20,000 was imposed under Section 43 (1) of the Madhya Pradesh General Sales Tax Act, 1958, for deliberately concealing the taxable turnover and filing a false return. A penalty of Rs. 2,000 was also imposed under Section 17 (3) for late filing of the return. The assessee went up in appeal to the Appellate Assistant Commissioner who decided the appeal by his order dated 13th January, 1969. The Appellate Assistant Commissioner came to the conclusion that there was reason for believing that the real turnover of the assessee was even more than Rs. 3,26,000 which was detected by the Inspector and which was later on accepted by the assessee in its revised return. In the opinion of the Appellate Assistant Commissioner the case needed further inquiry to find out the true measure of turnover. In this view of the matter, the Appellate Assistant Commissioner set aside the assessment and remanded the case for fresh assessment of the turnover. The order levying the penalty was, however, maintained on the view that concealment of turnover in the return filed by the assessee was deliberate. The assessee then went up in second appeal to the Appellate Tribunal. The Tribunal dismissed the appeal. The Tribunal also held that the concealment of turnover was deliberate and it was not a case of bona fide mistake. The Tribunal upheld the order of penalty of Rs. 20,000 under Section 43 (1 ). It, however, reduced the penalty under Section 17 (3) to Rs. 500. The assessee then applied for reference on which the following questions have been referred by the Tribunal for our answer:

(2.) LEARNED counsel appearing for the assessee has first submitted that under Sections 17 (3) and 43 (1), the order imposing penalty must follow the order of assessment of tax and that when the assessment was set aside by the Appellate Assistant Commissioner and the case was remanded, the order imposing penalty ought to have been set aside.

(3.) SECTIONS 17 (3) and 43 (1) read as follows: