Bishambhar Dayal, C.J.
1. This is a reference under Section 44 of the Madhya Pradesh General 'Sales Tax Act, 1958. The first question has been referred at the instance of the department and is as follows :
(1) Whether or not in an assessment under Section 18(4) a penalty under Section 43(1) of the Act could be imposed, treating the difference between the estimate made in best judgment and the amount disclosed by the assessee as the amount of concealed turnover, particularly when the assessment is related to suppression of purchases or sales ?
The second question has been referred at the instance of the assessee and is as follows :
(2) On the facts and circumstances of the case, whether the estimate of Rs. 1,00,000 was made on a reasonable basis
2. The assessee is a general merchant. He submitted a return showing a gross sale of Rs. 58,633 and 11 annas. The Sales Tax Officer got information that the gross sales returned by the assessee had been substantially minimised. A consignment of seven packages was, however, caught by the flying squad and on enquiry it was found that the value of those seven packages was about Rs. 25,000. The assessee was required to explain why he had shown the value of the goods contained in those packages at Rs. 1,442.67. On taking evidence, it was found that the explanation given by the assessee alleging loss of original bijak was false. The assessee had obtained a duplicate bijak in order to conceal the real value of the goods and the explanation for obtaining a duplicate bijak was also found to be false. Upon these findings, the gross turnover of the assessee was assessed at Rs. 1,00,000 and a sum of Rs. 1,000 was imposed on him as penalty. In this connection it may also be noted that the assessee had paid a tax of Rs. 2,910.64 with his return. According to the assessment made he was liable to pay a tax of Rs. 4,920. Thus there was avoidance of more than Rs. 2,000 to be paid as tax. The penalty was imposed under Section 43(1) of the Act. On appeal, the assessment and the penalty were upheld. However, on second appeal the Board of Revenue was of opinion that the penalty could not be imposed, although the assessment was fully justified. The reason given by the Board was 'in the instant case the assessing officer resorted to the best judgment assessment under Section 18(4)(d) of the Act. He did not come to a definite finding about the actual amount which was concealed to be shown in the returns. What he did was to make an estimate in the absence of proper accounts.... He has not given facts to show what amount was deliberately concealed and was not shown in the returns. An estimate of the turnover cannot be the amount which was concealed according to Section 43(1).' We are unable to agree with this line of reasoning by the Board of Revenue. Section 43(1) which authorises the imposition of penalty does not require that the actual amount of turnover concealed on which tax should have been paid, must be found on the basis of accounts and documents produced before the assessing officer and only then a penalty can be imposed. The relevant part of Section 43(1) is as follows :
If the Commissioned or the appellate authority in the course of any proceeding under this Act, is satisfied that a dealer has concealed his turnover or aggregate of the amount of purchase prices in respect of any goods or furnished a false return, the Commissioner or the appellate authority, as the case may be, may after giving the dealer a reasonable opportunity of being heard, direct that the dealer shall, in addition to the tax payable by him, pay by way of penalty a sum not exceeding the amount of the tax which would have been avoided if the return furnished by the dealer had been accepted as correct.
Under this Section, all that is required is that the assessing authority must come to a finding either that there has been concealment in the turnover by the assessee or that he has furnished a false return. The assessing authority thereupon gets the power to impose penalty. The last portion of the Section quoted above merely fixes the minmum amount of penalty that can be imposed and that amount is the difference which the dealer has to pay under the assessment actually made and the tax which would have been paid by him if his return had been accepted as correct. There is no element in this Section for compelling the assessing officer to find out the correct amount of tax which an assessee is bound to pay on the basis of correct accounts and documents which obviously the assessing officer cannot get if an assessee has filed false returns and produced false documents. There may also be cases where an assessee does not file any return and produces no documents before the assessing officer. Even in such cases a best judgment assessment has to be made. It cannot, therefore, be said that penalty can be imposed only in a case where a correct amount of tax has been found and not in a case where the tax has been imposed on the basis of best judgment assessment.
We are, therefore, unable to agree with the opinion of the Board of Revenue and are of the view that the first question must be answered in the affirmative (against the assessee).
3. As regards the second question, on the data given, it is not possible to say that the assessment of the turnover at Rs. 1,00,000 was so unreasonable as to call for interference. The assessee himself had shown his turnover at more than Rs. 50,000. Only one detected item indicated that he had concealed the turnover worth about Rs. 25,000. In such a case, increasing the turnover by a total amount of Rs. 50,000 from what had been returned by the assessee cannot be said to be excessive.
The second question also must, therefore, be answered in the affirmative (against the assessee).
4. The assessee will pay the costs of the Commissioner which are fixed at Rs. 100.