C.M. Lodha, C.J.
1. By this petition under Article 226 of the Constitution of India the petitioner has challenged the validity of the order by the Board of Revenue for Rajasthan dated 14th July, 1970 (annexure 5), and the show cause notice dated 15th May, 1972 (annexure 6), issued in pursuance thereto by the Commercial Taxes Officer, Circle Jodhpur, calling upon the petitioner to show cause why penalty be not levied upon it.
2. The petitioner is a joint-stock company, registered under the Indian Companies Act and owns ginning and pressing factory at Kesrisinghpur, District Sri Ganganagar. During the assessment year 1st April, 1961, to 31st March, 1962, the assessee purchased cotton within Rajasthan giving a declaration in form S. T. 17 under Rule 25C of the Rajasthan Sales Tax Rules that it would be resold within the State of Rajasthan. However, in contravention of the declaration, the assessee transferred part of the cotton to their godowns outside Rajasthan and also sold it outside Rajasthan. The assessing authority levied purchase tax on all these transactions and also imposed a penalty under Section 16(1)(g) of the Rajasthan Sales Tax Act, 1954, as it then existed (hereinafter referred to as 'the Act'). Aggrieved by the order of the assessing authority, the assessee filed appeal before the Deputy Commissioner (Appeals), Jodhpur, who allowed the appeal in part and while maintaining the order imposing the tax, set aside the penalty on the ground that when the declaration was made by the assessee it might have intended to resell the cotton within Rajasthan. The assessee as well as the department filed revision applications before the Board of Revenue against the order of the Deputy Commissioner and both the revisions were dismissed by the Board by its order dated 10th April, 1967. The assessee made an application to the Board for stating the case and referring the question of law arising out of it to this Court. Accordingly the Board referred the following question of law to this Court:
Under the facts and circumstances of the present case, whether before 4th May, 1964, when the second proviso to Section 2(s)(iv) of the Rajasthan Sales Tax Act, 1954, came into force, and the assessee who did not pay sales tax by making a declaration that goods purchased by him will be resold within the State, or for sale in the course of inter-State trade or commerce or for sale in the course of export outside the territory of India but in violation of that declaration sold the goods to the dealers outside the State or transferred them outside the State ostensibly for sale, or one was entitled to get these sales excluded from his taxable turnover by virtue of the provisions of Section 2(s)(iii) of the Rajasthan Sales Tax Act, 1954.
3. The reference was decided by this Court on 19th December, 1969 (annexure 4). This Court observed as follows :
In the Act or the Rules as they stood till 26th March, 1962, there was no provision for recovery of any purchase tax on cotton from the purchaser, who makes a declaration, which subsequently turns out to be wrong. So no tax could be recovered from the assessees on the cotton purchased by them in respect of which they filed the above declaration. Only a penalty could be levied under Section 16(1)(g) the limit of which was prescribed at Rs. 100.
4. The operative part of the order reads thus :
The result is that on purchase of cotton made between 26th March, 1962, and 31st March, 1962, the assessees are liable to pay purchase tax under Section 5A. No sales tax is leviable on the cotton purchased by them at all.
5. The matter then again went before the Board which passed the impugned order dated 14th July, 1970 (annexure 5). In the operative part of the order the Board observed as follows :
The judgment has the effect of superseding the Board's order dated 10th April, 1967 (1963 RRD 162), referred to in paras 3 and 4 above. The orders of the Deputy Commissioner and the assessing authority in so far as they pertain to the question dealt with above are, therefore, set aside, and the assessing authority is directed to pass fresh orders in the light of the High Court judgment quoted in para 6.
6. As already stated above, in pursuance of the aforesaid order of the Board the assessing authority gave notice (annexure 6) to the assessee to show cause why penalty be not levied under Section 16(1)(g) of the Act.
7. The learned counsel for the petitioner has urged that the department's revision to the Board on the question of penalty having been dismissed and no reference by the Board to this Court having been sought by the department, the question of penalty was set at rest and the High Court had no jurisdiction to make any observation on the question whether penalty was leviable. It has been further argued that, at any rate, the observation made by the High Court in this connection amounted only to a statement of law and no direction has been given to the Board to reopen the matter regarding imposition of penalty. It has therefore been submitted that the direction given by the Board to the assessing authority to issue notice to the assessee for imposition of penalty was without jurisdiction. It has also been urged that the Deputy Commissioner (Appeals) had considered the question of imposition of penalty on merits and had held that no case for imposition of penalty had been made out.
8. On the other hand, Mr. S.C. Bhandari, the learned counsel for the department, has urged that the writ petition should be thrown out on the ground of laches. It is submitted that the impugned order was passed by the Board as far back as 14th July, 1970, whereas the present writ petition has been filed after more than two years. In this connection it has also been argued that if the assessee was aggrieved by the order of the Board dated 14th July, 1970, then it ought to have asked for a reference under Section 15 of the Act and having not done so, it is not open to the assessee to question the order of the Board by a writ petition. Mr. Bhandari has also contended that in any view of the matter, only a show cause notice has been issued to the petitioner by the assessing authority and the petitioner will have ample opportunity to put its defence before the assessing authority. But the assessee has rushed to this Court at a very preliminary stage.
9. In Income-tax Appellate Tribunal, Bombay v. S.C. Cambatta & Co. Ltd.  29 I.T.R. 118, while dealing with similar provisions of the Indian Income-tax Act (11 of 1922) a Division Bench of the Bombay High Court observed that if in giving effect to the decision of the High Court in a reference, the Tribunal passes an order out of which a question of law arises, which question never arose out of its original order, then the assessee or the Commissioner has a right of reference to the High Court under Section 66(1) or Section 66(2). It was further observed that an appeal before the Appellate Tribunal is finally disposed of whenever there is a reference to the High Court. What the Tribunal does after the High Court has heard the case is to exercise its appellate powers under Section 33 and the final decision in the appeal can therefore be given only after the disposal of the reference.
10. Thus, it appears to us that there was nothing to prevent the assessee to ask for a reference in respect of a question of law arising out of the impugned order by the Board. The assessee could have got a reference made on the point, whether in the facts and circumstances of the case, the Board was justified in directing the assessing authority to pass a fresh order in the light of the judgment of the High Court dated 19th December, 1969, but the assessee did not do so, and allowed the proceedings to be resumed by the assessing authority who gave a show cause notice to the assessee. It is true that the question of penalty was not referred to the High Court at all. It is also true that there is no positive direction in the High Court's order that the penalty proceedings may be started afresh against the petitioner. The utmost that can be said in favour of the department is that the High Court observed that in the facts and circumstances of the case no purchase tax was leviable and only a penalty could be levied under Section 16(1)(g) of the Act and the Board took this observation as a direction and passed a fresh order in accordance with it under Section 15(5) of the Act.
11. The learned counsel for the assessee has urged before us that the question of penalty was not debated before this Court at all and only a passing observation was made by the Court that penalty was leviable, otherwise the operative part of the order makes it clear that the court answered the question to the effect that no sales tax is leviable on the cotton purchased by the assessee. Thus it does appear to us that the High Court while disposing of the reference by its order dated 19th December, 1969, must not have critically examined the question whether penalty was leviable in such a case as the present one. However, there is force in the respondent's contention that the impugned order of the Board has been called into question after more than two years and that no reference has been asked for against that order which the assessee could have. It is also clear that the door for showing cause against imposition of penalty has not yet been finally closed to the assessee who will have reasonable and adequate opportunity to satisfy the assessing authority that either no penalty is leviable in law or that in the facts and circumstances, the present is not a fit case for levy of any penalty.
12. In this view of the matter, we do not feel inclined to interfere with the impugned order by the Board and dismiss the writ petition with this observation that the assessing authority will be at liberty to examine the question whether penalty is leviable according to law and if so, whether it was a fit case for levy of penalty at all. There will be no order as to costs.