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TMI Blog1976 (3) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to submit any explanation. Thereupon, on 31st March, 1971, an order was passed levying penalty of Rs. 7,988.30 on the basis of suppression of a turnover of Rs. 79,882.58. It is the said order, levying penalty, which was challenged in appeal by the assessee, both before the Appellate Assistant Commissioner and the Tribunal and, having failed before them, he has filed this tax revision case. The main contention raised by Sri S. Dasaratharama Reddi, the learned counsel appearing for the petitioner, is that the issuance of show cause notice on 24th March, 1971, even before finalising the revised assessment, which was done only on 31st March, 1971, is incompetent and illegal. The learned counsel submitted that penalty can be levied under the Act only if the assessee is found guilty of wilful failure or suppression of turnover and that the assessing authority must first give a finding in the assessment proceedings that the assessee had been guilty of concealment, wilful or otherwise, and then alone issue a notice proposing to levy penalty and, after hearing the assessee again, must pass orders. He submitted, with reference to the provisions of sub-section (8) of section 14, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) produces the accounts, registers and other documents after inspection, or (iii) submits a return subsequent to the date of inspection, the assessing authority may, at any time within a period of six years from the expiry of the year to which assessment relates, after issuing a notice to the dealer and after making such inquiry as he considers necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay in addition to the tax so assessed, a penalty as specified in sub-section (8). (4) In any of the following events, namely, where the whole or any part of the turnover of business of a dealer has escaped assessment to tax, or has been under-assessed or assessed at a rate lower than the correct rate, or where the licence fee or registration fee has escaped levy or has been levied at a rate lower than the correct rate, the assessing authority may, after issuing a notice to the dealer, and after making such enquiry as he may consider necessary, by order, setting out the grounds therefor- (a) determine to the best of his judgment the turnover that has escaped assessment and assess the turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty proceedings must be started only after the assessment proceedings are concluded. Similarly, when we come to sub-section (4), it says that, in addition to the tax assessed, the assessing authority may also direct the dealer to pay a penalty, as specified in sub-section (8). Sub-section (4) provides that, in a case where a part of the turnover has escaped assessment or an under-assessment has been made, the assessing authority may, after notice and necessary enquiry, make a revised assessment. While doing so, the assessing authority is also given the power to levy penalty. Even the language of sub-section (4) does not, either expressly or by necessary implication, indicate that the penalty proceedings cannot be commenced until the revised assessment proceedings are concluded. Sub-section (4-B), which was put in only by way of amendment in 1963, recognises a rule of natural justice, viz., a reasonable opportunity to the assessee to show cause, before the penalty is levied. Even in the absence of sub-section (4-B), there can be no doubt that the assessing authority would have been bound to give such an opportunity-before levying penalty. Now, coming to sub-section (8), it only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to explain the omission or failure before levy of penalty, and all that the court has to see is, whether he had had such a reasonable opportunity, and not whether a notice should have been given even before he was assessed to tax on the escaped turnover. The learned counsel, however, contended that another Division Bench of this Court has taken a different view on this question in Narasingh Kirana Stores v. Deputy Commercial Tax Officer, HyderabadI.L.R. [1973] A.P. 496. But we find, on a perusal of the said decision, that the said case does not lay down any contrary proposition, nor does it support the contention of the petitioner herein. That was a case where a composite notice, both for revised assessment as well as proposing the levy of penalty, was issued by the assessing authority. In the said notice, it was proposed to levy a penalty at five times the tax due. The contention raised was that, such a composite notice for making a revised assessment, as well as for levying penalty at five times the tax due, is bad in law. While considering the said contention, it was first observed by the Bench: "There is no doubt that the tax and penalty proceedings are one composite pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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