Jeevan Reddy, J.
1.The petitioner (assessee) challenges the correctness of the Tribunal's order in T.A. No. 487 of 1974 in this tax revision case.
2. The petitioner is a dealer in foodgrains. He submitted a return for the assessment year 1964-65, wherein he did not disclose a part of his turnover. Subsequently, the assessment was reopened within a period of six years, and a revised assessment order was passed on 31st March, 1971, adding the suppressed turnover. The assessee, however, did not choose to file any appeal, or otherwise question the said revised assessment order and it has, therefore, become final. In connection with the said revised assessment proceedings, a notice dated 24th March, 1971, was issued to the petitioner calling upon him to show cause as to why penalty should not be levied upon him for not disclosing a part of his turnover. The said show cause notice was received by the petitioner on 27th March, 1971, but he 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.
3. 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, that the quantum of penalty differs according to the finding of the assessing authority. In other words, if the failure to disclose is found to be wilful, penalty can be levied up to five times the tax, while, if it is found to be not wilful, only up to one half of the tax. In cases where the failure to disclose is found to be under a bona fide mistake, no penalty whatsoever is leviable. The learned counsel, therefore, contended that first a finding must be given whether the failure is wilful, not wilful, or under a bona fide mistake; and then alone the proceedings for penalty must be commenced. Reliance was placed upon the decision of a Division Bench of this Court in Narasingh Kirana Stores v. Deputy Commercial Tax Officer, Hyderabad I.L.R.  A.P. 496, in support of the said contention.
4. Before we deal with the above submission, it would be appropriate to set out the relevant provisions of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as 'the Act'). Section 5 is the charging section, which creates the levy, to be ascertained in accordance with the schedules appended to the Act, while Section 14 provides for the procedure for assessment and levy of penalties. Sub-section (1) of Section 14 may first be set out:
14. (1) If the assessing authority is satisfied that any return submitted under Section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof; but if the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer. An assessment under this section shall be made only within a period of four years from the expiry of the year to which the assessment relates.
5. Sub-sections (2), (3) and (4) of Section 14 may then be set out:
(2) When making an assessment to the best of judgment under Sub-section (1), the assessing authority may also direct the dealer to pay in addition to the tax so assessed a penalty as specified in Sub-section (8) on the turnover that was not disclosed by the dealer in his return.
(3) Where any dealer liable to tax under this Act --
(i) fails to submit return before the date prescribed in that behalf, or (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 turnover so determined;
(b) assess the correct amount of tax payable on the turnover that has been under-assessed;
(c) assess at the correct rate the turnover that has been assessed at a lower rate;
(d) levy the licence fee after determining to the best of his judgment the turnover on which such fee is payable;
(e) levy the registration fee that has escaped levy; or
(f) levy the correct amount of licence fee or registration fee in a case where such fee has been levied at a rate lower than the correct rate.
6. In addition to the tax assessed or fee levied under this Sub-section, the assessing authority may also direct the dealer to pay a penalty as specified in Sub-section (8),
7. Sub-section (4-B), which provides for an opportunity to be afforded to the assessee, before levying penalty, reads as follows:
(4-B) Before issuing any direction for the payment of any penalty under Sub-section (2), Sub-section (3) or Sub-section (4), the assessing authority shall give the dealer a reasonable opportunity to explain the omission to disclose the turnover or to furnish correctly any particulars and shall make such inquiry as he considers necessary.
8. The next Sub-section to be noted is Sub-section (8), which may also be set out:
(8) The penalty leviable under Sub-section (2) or Sub-section (3) or Sub-section (4) shall not exceed --
(a) five times the tax, or the fee, due in a case where the assessing authority is satisfied that the failure of the dealer to disclose the whole or part of the turnover or any other particulars correctly, or to submit the return before the prescribed date, was wilful; and
(b) one half of the tax, or the fee, due in a case where such failure was not wilful:
Provided that where such failure occurred due to a bona fide mistake on the part of the dealer, no such penalty shall be levied....
9. It would be relevant to note the language of Sub-section (2) in the first instance. It says that when making an assessment to the best of judgment, the assessing authority may also direct the dealer to pay the penalty as specified in Sub-section (8). In other words, the order levying penalty can be made at the time of making the best judgment assessment itself. Sub-section (8) merely provides for the quantum of penalty leviable in each case. So, there is no room for contending that both the proceedings cannot be simultaneous and that the penalty 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.
10. Now, coming to Sub-section (8), it only provides a ceiling on the quantum of penalties, in three situations, viz., (i) where the failure of the assessee is found to be wilful; (ii) found to be not wilful; and (iii) found to be under a bona fide mistake. Thus, there are no words in Section 14 of the Act indicating any such limitation, as contended for by the learned counsel for the petitioner. On the contrary, the Act contemplates that both the proceedings for assessment, revised assessment and penalty should be simultaneous. Before making an assessment or a revised assessment, the authority has to provide a reasonable opportunity to the assessee to present his case, and so is the case in the matter of levying penalty. It may be that the assessing authority issues a notice proposing to levy a penalty on the ground that the assessee had wilfully suppressed or concealed a part of his turnover; but, that does not mean that the assessing authority has pre-determined the issue or finally made up its mind. It is only a prima facie opinion which the assessing authority is communicating to the assessee to enable him to explain or rebut the same and, after hearing the assessee, he may either confirm his earlier opinion, or modify or revoke the same, as the case may be. A similar notice is contemplated under Sub-section (4) of Section 14 before making a revised assessment. So far as the facts of this case are concerned, notice for revised assessment seems to have been given much earlier than the notice in respect of penalty. It appears that, while examining the case in connection with the revised assessment, the assessing authority found a prima facie case, warranting levy of penalty and, therefore, issued the said show cause notice on 24th March, 1971. We do not see any illegality in the said procedure. It is not necessary that the assessing authority must first finalise the revised assessment and then alone commence the proceedings for levying penalty. Such an interpretation would, in fact, do violence to the language used by the legislature in Section 14. The same view was taken by a Division Bench of this Court in Sait Goverchand Manchalal v. State of Andhra Pradesh  28 S.T.C. 498, to which one of us (the Honourable the Chief Justice) was a party. While dealing with an identical Submission, it was held therein that, according to Sub-section (4-B), the assessee is entitled to a reasonable opportunity 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.
11. 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, Hyderabad I.L.R.  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 proceedings' and then, after considering the facts of that case, it was held that the assessee was entitled to a further opportunity on the quantum of penalty. It was observed, having regard to the facts of that case, that the officer had already come to a conclusion that penalty should be levied at five times the tax due and that, therefore, he might not consider the reasonable explanation that might be offered by the dealers in regard to the nature of the default. It was then observed that 'whatever that may be, it is in our opinion just and necessary to give a further opportunity to the dealers to show the nature of the default committed by them....' It is, therefore, clear that, in the particular facts of that case, it was found that the assessees did not have a reasonable and adequate opportunity, and hence such an opportunity was directed to be given to them. It is nowhere stated in the said decision that a notice, proposing the levy of penalty, should be issued only after the revised assessment proceedings are concluded under Sub-section (4). The said decision has to be understood in the light of the facts of that case, where it was found by the learned Judges, as a fact, that no proper opportunity was given to the assessees.
12. It was then contended by Mr. S. Dasaratharama Reddi that the impugned order was not really passed on 31st March, 1971, but was passed sometime later and was ante-dated. This contention is based on the fact that both the revised assessment order and the impugned order purport to have been passed on 31st March, 1971, itself but, while the assessment order was served upon the petitioner on 12th July, 1971, the impugned order was served only on 7th July, 1972. The submission is that such a thing must have been done by the assessing authority with a view to avoid the bar of limitation. The said contention has been negatived by the Tribunal, while observing that the circumstances of the case do create a gross suspicion in the mind of the Tribunal, but there is no clear evidence to uphold the assessee's contention in this behalf. We are in agreement with the view expressed by the Tribunal. We must also observe that such errors (we presume that it is an error) and the inordinate delay in serving the orders, give room for such complaints, which is not conducive to the building up of confidence in the fairness of the assessing authorities, in the minds of the assessees. The authorities would do well in not providing any room for such contentions.
13. No other contention was raised by the learned counsel and, accordingly, this tax revision case is dismissed with costs. Advocate's fee Rs. 100.