1. These three petitions arise out of the C.P. and Berar Sales Tax Act, 1947. The petitioner is a merchant and deals in bidi leaves at Gondia in Bhandara district. He was a registered dealer and the relevant periods of assessment in each of the petitions respectively are from 7th November, 1953 to 26th October, 1954, 27th October, 1954 to 14th November, 1955, and 15th November, 1955 to 2nd November 1956. The Sales Tax Officer found that the petitioner had not maintained account books. He had only bill books. In the first years, the total sales as they appeared from the bill books were Rs. 3,12,250-3-6. As he did not maintain accounts, the Sales Tax Officer made best judgment assessment under section 11(4) of the Act by increasing the sale by 10 per cent. and he adopted the turnover of Rs. 3,43,475-0-0. It appeared that the assessee's case was that the goods worth Rs. 2,56,892-15-3 were exported by him outside the State and in proof of this he produced railway receipts dispatch book. The Sales Tax Officer, however, was not satisfied that the entire export was made outside the State. He only allowed a portion of the claim. He assessed the total tax at Rs. 5,497-7-0. As the petitioner had failed to furnish the return as required by the Act in time, he levied a penalty of Rs. 600.
2. In the second case, the total sales as they appeared from the bill books were Rs. 3,08,829-10-3. For the same reason as in the previous case, the Sales Tax Officer increased the sales by 10 per cent. under section 11(4) of the Act and the turnover adopted was Rs. 3,39,712-9-6. The petitioner alleged that he exported goods worth Rs. 3,08,829-10-3 outside the State and produced the relevant receipts. For the same reasons as in the other case, he did not allow the entire alleged export and assessed the taxable turnover at Rs. 1,88,875-0-6 and assessed the tax at Rs. 3,714-13-9. He also imposed a penalty of Rs. 400.
3. In the third case, the total sales as they appeared from the bill books were of the amount of Rs. 3,53,382-1-3. For the same reasons as in the other case, the Sales Tax Officer increased the sales by 10 per cent. and adopted the turnover at Rs. 3,88,720-14-0. The petitioner showed the railway receipts which showed the export of goods worth Rs. 3,53,382-1-3. For the same reason as before, the Sales Tax Officer allowed deduction for the alleged export only to the extent of sales at Rs. 3,18,051-13-6 and determined the taxable turnover at Rs. 68,527 and assessed the tax at Rs. 2,141-7-6. He also imposed a penalty of Rs. 535.
4. The petitioner appealed to the relevant authorities and finally to the Sales Tax Tribunal which confirmed the orders made by the Sales Tax Officer. The petitioner asked for a reference to the High Court under section 23 of the Act in relation to the sale of goods which the petitioner alleged were exported and asked for the opinion of the High Court, whether under the circumstances of the case, those sales were also exempted. The High Court, by its judgment, dated 28th July, 1964 Reported as Hirji Kalyanji Wadera v. The State of Maharashtra  16 S.T.C. 502, held that those sales were also exempt from sales tax. After the matter went to the Tribunal, the Tribunal in accordance with the judgment of the High Court directed modification of the levy of the tax.
5. The petitioner before the Tribunal argued that even the increases made by the Sales Tax Officer on the basis of best judgment assessment under section 11(4) of the Act were covered by the High Court judgment. He also challenged the levy of penalty. The Tribunal held that the matter was not urged before the High Court and, therefore, the contention was not open to the petitioner. The petitioner challenges these orders. At first, the petitioner had filed only one application, but as there were three separate orders as originally made, we asked the petitioner to file separate applications which he has done today. The learned Additional Government Pleader has accepted notice on behalf of the Sales Tax Authorities.
6. The first point that is urged is that even in the case of the added sales in accordance with section 11(4) of the Act, allowance must be made as if the goods were exported by the petitioner. Now, the deduction under section 27-A is not as a matter of right. It must be established by the petitioner that the goods were exported. The judgment in the first case given by the Sales Tax Officer clearly indicates that the petitioner had proved export of goods worth Rs. 2,56,892-15-3 by actual production of the railway receipts. In the other case as the exports were not established, the presumption is that the rest of the sales exceeding the value of goods shown to have been exported were sales within the State. The same reasoning applies to the other cases. No doubt, the Sales Tax Officer had stated in the third case that the total sales from the bill books were Rs. 3,08,829-10-3 and the assessee had claimed that he had exported goods worth Rs. 3,08,829-10-3. This is merely incorrect way of making the statement. The assessee had sold in the second assessment year goods worth Rs. 3,620 to registered dealers in the State itself. Apart from this, unless, as we have said, he actually proves the export, he is not entitled to deduction and, in fact, as he proved the export in the second and the third cases of goods worth Rs. 3,08,829-10-3 and Rs. 3,53,382-1-3 by the production of railway receipts, he is entitled to deduction only in respect of those sales. This contention, therefore, must necessarily fail.
7. Mr. Thakar then has contended that inasmuch as the maximum penalty that can be imposed under section 10 is 1/4th of the actual tax leviable as the tax is reduced because of the judgment of this Court in the reference, the penalty levied will be reduced accordingly. Now, the judgment of the Sales Tax Officer shows that the penalty that he levied is not 1/4th in every case. The Sales Tax Officer is entitled to charge penalty at the maximum leviable. If, therefore, the amount of tax is reduced, the penalty exceeding 1/4th cannot be charged. Under the circumstances, therefore, we must modify the order regarding penalty and we direct that the penalty shall not be leviable in excess of 1/4th of the amount of the tax leviable in each of the cases.
8. Subject to this modification, the petitions fail substantially and the rule is discharged. The petitioner will pay costs of the respondents in all the three cases.
9. Petitions dismissed.