Gurdev Singh, J.
1. The petitioner-firm Messrs Rex Hosiery Factory is carrying on its business at Ludhiana and is registered under the Punjab General Sales Tax Act, 1948, with the Assessing Authority of that place. For several years past it has been filing its returns under the Act with the Assessing Authority at Ludhiana. For the year 1962-63, however, it received notice from Shri Kuldip Singh Jaspal, the then Excise and Taxation Officer (Finance Department) at Chandigarh, to appear before him for assessment. Under the Punjab Government notification, dated 11th June, 1963, this officer had been appointed by the State of Punjab under Section 3 read with Section 2(a) of the Punjab General Sales Tax Act to assist the Excise and Taxation Commissioner and to frame assessments in the whole of the State of Punjab. Shri Kuldip Singh Jaspal was later on succeeded by the respondent Shri S.K. Jain before whom appearance was entered on behalf of the petitioner-firm. In the course of the proceedings before him, he called upon the petitioner to produce its account books and evidence of certain transactions. On conclusion of the proceedings before him, on 24th August, 1964, the respondent No. 1 made the assessment order (annexure A-2), by which he assessed the petitioner-firm to a tax of Rs. 16,383.96, and further imposed upon it a penalty of Rs. 500 under Section 10(7) of the Act, holding that the petitioner-firm had 'failed to give any explanation for indulging in evasion or for maintaining incorrect account books'. In pursuance of this order demand notices, exhibits A-3 and A-4, for Rs. 16,883.96 and Rs. 869.88 were served, upon the petitioner. It is the validity of this order of assessment, dated 24th August, 1964, and the two demand notices referred to above that has been challenged before me under Articles 226 and 227 of the Constitution.
2. The petitioner's learned counsel, Shri Rajinder Sachar, has contended :-
(1) that the order of assessment passed by respondent No. 1 was without jurisdiction as he was not the authority competent to assess the petitioner-firm which has its place of business at Ludhiana, and, in any case, he was not competent to deal with the assessment of the petitioner-firm in the absence of any order of transfer to him by competent authority,
(2) that the respondent No. 1 was not justified in making an ex parte order of assessment, and
(3) that the imposition of penalty of Rs. 500 under Section 10(7) of the Punjab General Sales Tax Act was illegal as it was made without affording the petitioner an opportunity of being heard.
3. It is not disputed that S.K. Jain, respondent No. 1, has been appointed as an Excise and Taxation Officer (Finance Department) to assist the Excise and Taxation Commissioner under Section 3 read with Section 2(a) of the Punjab General Sales Tax Act, and he has been invested with powers to frame assessment in the entire State of Punjab. Shri Sachar has, however, contended that since the petitioner-firm has its place of business at Ludhiana, it was registered with the Assessing Authority at Ludhiana and the respondent No. 1 had no power to deal with its returns and take up its case for assessment. In this connection, he placed reliance on Kishan Chand and Company v. S.K. Jain 67 P.L.R. 465 which was followed by Narula, J., in Mansa Ram v. J.B. Rajyana 67 P.L.R. 1056. In the latter case it was held that once a Sales Tax Officer issues a notice and returns are filed before him in pursuance of the said notice and he is seized of the matter, no other Sales Tax Authority, even if he has inherent jurisdiction, can proceed with the assessment on the basis of those returns without first obtaining a formal order of transfer of the case from the Commissioner. Both these cases are, however, distinguishable as in those the impugned proceedings, which were being taken by the Assessing Authority having jurisdiction throughout Punjab, were pending and no assessment had been made. In those circumstances, it was held that without a proper order transferring the assessment proceedings completely from the file of the appropriate Assessing Authority actually seized of the assessment proceedings at the ordinary place of business of the assessee to the record of the special Assessing Authority at Chandigarh, the assessee was likely to be prejudiced, and it was in view of the hardship thus involved that the assessment proceedings pending before the special Assessing Authority were quashed.
4. There is nothing in either of these two decisions cited on behalf of the petitioner to justify the contention that without an order of transfer the proceedings pending before the Assessing Authority at Chandigarh became void or without jurisdiction. In fact, the learned Judges of the Bench in Messrs Kishan Chand and Company's case 67 P.L.R. 465 made it clear that the assessment made by the special Assessing Authority having jurisdiction throughout the State of Punjab would not become void merely because no order transferring the proceedings was made by the competent authority. This is evident from the following observations appearing at page 471 of the Report :-
We do not mean, and of course we do not hold, that an nt made by the respondent in respect of a dealer whose place of business is at Amritsar would be open to be struck down as invalid for want of inherent jurisdiction, and this, not even if the assessment proceedings had properly been commenced before the Assessing Authority functioning at Amritsar, nor do we hold that an irregular manner of seizing of an assessment proceeding would by itself attract jurisdictional infirmity necessarily vitiating a final assessment order.
5. In view of these observations, by which I am bound, the assessment made by the respondent No. 1 (Shri S.K. Jain, Assessing Authority, Punjab at Chandigarh), cannot be considered to be without jurisdiction.
6. I, however, agree with the learned counsel for the petitioner that the impugned order of assessment so far as it relates to the imposition of penalty is not valid. Section 10(7) under which the Assessing Authority purports to have acted clearly provides that before imposing the penalty the Assessing Authority has to afford 'a reasonable opportunity of being heard' to the dealer. Admittedly, in the instant case no notice was issued to the petitioner against the action proposed to be taken under this provision of law, nor was he heard on that matter. In these circumstances, I am of the opinion that the imposition of penalty on the petitioner is not valid and the demand notice so far as it relates to the amount of penalty cannot be enforced against the petitioner-firm. The petition is, accordingly, accepted to this extent. The necessary writ shall issue. In the circumstances of the case, I leave the parties to bear their own costs.