1. This tax revision case arises in the following circumstances :
2. The petitioner is a dealer in rice and groundnuts. For the assessment year 1975-76 the petitioner returned a net turnover of Rs. 5,83,060 and claimed an exemption of Rs. 7,91,732. On 24th July, 1975, the business premises of the petitioner was searched by the commercial tax authorities and certain variations were found in stock position with reference to the stock registers. The Commercial Tax Officer by his order dated 5th October, 1976, determined such total variations at Rs. 36,916 and added the same to the admitted turnover. After disallowing certain exemptions the net turnover was determined at Rs. 9,59,390. Subsequently the Commercial Tax Officer initiate penalty proceedings and by his order dated 6th June, 1977, levied penalty of Rs. 9,982 i.e., at five times the tax alleged to have been suppressed.
3. Against the said orders of the Commercial Tax Officer, the petitioner preferred two appeals before the Assistant Commissioner, Guntur, contending that the addition of turnover is unwarranted and levy of penalty is illegal. By common order dated 27th October, 1977, the Assistant Commissioner while deleting additions of turnover to a tune of Rs. 2,616 confined the addition of turnover of Rs. 34,300 which consisted of Rs. 23,500 towards sales of rice and Rs. 10,800 towards sales of groundnut. While disposing of the appeal against penalty, the Assistant Commissioner held that having regard to the facts of the case, penalty at half the tax due on the amount added would be just and proper. So holding, the Assistant Commissioner set aside the penalty order and remanded to the assessing authority for passing fresh orders in the light of the observations.
4. Against the said orders of the Assistant Commissioner, the petitioner preferred further appeals namely, T.A. No. 264 of 1978 (assessment appeal) and T.A. No. 1016 of 1978 (penalty appeal). By its common order dated 7th March, 1980, the Appellate Tribunal held that the addition of turnover of Rs. 10,800 based on the variations of stocks as regards groundnuts is illegal. However, as regards additions made on the basis of variations of rice stocks, the addition was sustained. As regards the penalty appeal, by the same order, the Appellate Tribunal held that penalty at double the tax would be just and proper and that penalty of five times the tax is excessive. It is against the order in the penalty appeal, this tax revision case is filed.
5. The question for consideration is whether the order of the Appellate Tribunal, levying penalty at twice the tax, is proper on the facts and in the circumstances of the case The main submission of Mr. S. R. Ashok, the learned counsel for the petitioner is that the Appellate Tribunal committed an obvious error in thinking that penalty at five times the tax levied by the Commercial Tax Officer was still in force and it was on that mistaken premise, penalty was reduced to twice the tax. He submits that the Tribunal lost sight of the fact that the Assistant Commissioner modified the order of the assessing authority by holding that penalty at half the tax would meet the ends of justice. On the other hand, the learned Government Pleader tried to sustain the order on the ground that the Appellate Tribunal has power to enhance the penalty under clause (4) of Section 21 of the A.P.G.S.T. Act and the impugned order was passed in exercise of the said power.
6. To appreciate the question, it is necessary to examine the order under challenge. The relevant portion is as follows :
'As regards penalty we are satisfied that in the facts and circumstances the appellants have rendered themselves liable for penalty as provided under section 14(8) of the A.P.G.S.T. Act. However, the levy of penalty at five times tax attributable to the disputed turnover assessed is, in our opinion, excessive and on the high side. Ends of justice would be met if penalty equal to twice the tax due with reference to the turnover assessable as per our decision in T.A. No. 264 of 1978 is levied.'
7. From this it is clear that the Tribunal was under the impression that penalty was levied at five times the tax due. It was of the opinion that the same is not justified. The Tribunal completely lost sight of the fact that the order of the Commercial Tax Officer levying five times the penalty was set aside in appeal and the Assistant Commissioner modified it to half the tax and remanded the matter for quantification. That the Tribunal misdirected itself is further clear by the opening sentence in the order which says 'T.A. No. 1016 of 1978 is an appeal against the order of the Assistant Commissioner, Guntur, in Appeal No. 388/77-78 dated 27th October, 1977, dismissing the appeal preferred against the order of the Commercial Tax Officer, Guntur, in P.R. No. 5/77-78 in G.I. No. 12034/75-76 dated 6th June, 1977, imposing penalty of Rs. 9,982 under section 14(8) of the A.P.G.S.T. Act.' This is a clear mistake as the appeal against penalty was allowed to a substantial extent by the Assistant Commissioner. Thus there is a clear error apparent on the face of the record which had vitiated the order and the same is clearly unsustainable. This is not a case of enhancement of penalty as contended by the learned Government Pleader. Hence it is not necessary to consider the point raised by Mr. S. R. Ashok that the penalty cannot be enhanced without a written notice.
8. In the result, the impugned order levying penalty equal to twice the tax is set aside. We do not propose to remand the matter to the Tribunal as it would unnecessarily protract the litigation. The order of the Tribunal is accordingly set aside and the order of the Assistant Commissioner levying penalty equal to half the tax is upheld. The tax revision case is allowed accordingly. The result of our decision is as follows :
(1) The addition of Rs. 23,500 towards rice is sustained.
(2) Penalty at the rate of half the tax as held by the Assistant Commissioner is confirmed.