1. In this tax revision case filed by the State, the order of the Tribunal cancelling the levy of penalty on the respondent-assessee under section 12(3) of the Tamil Nadu General Sales Tax Act has been challenged. The assessee was finally assessed on a taxable turnover of Rs. 6,35,788.00 for the assessment year 1973-74 by an order dated 31st March, 1975. Their place of business was earlier inspected by the Intelligence Wing on 6th August, 1973, and certain slips had been recovered and it was found that slip No. 7 revealed sale of pig-iron of a quantity of 24.185 tonnes for the value of Rs. 15,357.48. After the assessment order was passed, the succeeding officer found in the assessment order a suppression of Rs. 15,357.48 and therefore held that a levy of penalty is called for in this case. He took the probable suppressions to be Rs. 71,527.96 and levied a penalty of Rs. 679.00. The assessee preferred an appeal and the appeal was partly allowed, reducing the penalty to an amount equivalent to the tax on the suppressed turnover of Rs. 15,357.48. Not satisfied with the relief granted by the appellate authority, the assessee went before the Tribunal, contending that the levy of penalty is not justified in the case. One of the points urged by the assessee before the Tribunal was that the assessing officer who passed the order of assessment had no intention to levy penalty, but it is only the succeeding officer who has chosen to rake up the matter and proceeded to levy penalty by making certain additions to the alleged suppression found by his predecessor and therefore the levy of penalty is not justified. The said contention of the assessee has been accepted by the Tribunal. According to the Tribunal, when the original assessing authority had not been chosen to levy any penalty at the time of passing the assessment order, it is not open to the succeeding officer to rake up the matter and levy a penalty. In that view, the Tribunal has set aside the order levying penalty. The Tribunal has expressed the view that the succeeding officer had no power to rake up the mater and levy penalty in the case of an assessment made by his predecessor. The said order of the Tribunal is now challenged before us.
2. According to the learned Government Pleader, section 12(3) read with section 12(5) contemplates the penalty being levied either at the time of the original assessment or later by a separate order within a period of five years. The fact that the legislature has fixed a time-limit for the exercise of the power to levy penalty indicates that the order levying penalty could be passed at any time within a period of five years as per the proviso to sub-section (3) of section 12 which was in force at the relevant period before the amendment in 1979. Section 12(3) as it stood then read as follows :
'(3) In addition to the tax assessed under sub-section (2), the assessing authority may, in the same order of assessment passed under sub-section (2), or by a separate order, direct the dealer to pay a penalty not exceeding one and a half times the amount of tax due on the turnover that was not wilfully disclosed by the dealer in his return or in the case of wilful failure to submit a return, a penalty not exceeding one and a half time the tax assessed, as the case may be :
Provided that no penalty under this sub-section shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition :
Provided further that no such penalty shall be imposed after a period of five years from the expiry of the year to which the assessment under sub-section (2) relates.'
3. The above provision has conferred a power on the assessing authority to levy penalty in respect of an order of assessment passed under sub-section (2) in the same assessment order or by a separate order not exceeding 1 1/2 times the amount of tax on the turnover that was suppressed subject to two conditions : (i) that a reasonable opportunity of showing cause being given to the assessee before the imposition of the penalty and (ii) that any such imposition of penalty should be within the period of five years from the expiry of the year to which the assessment under sub-section (2) related. In this case, the abovesaid two conditions are satisfied for the assessee has been given a show cause notice why the penalty should not be levied before the actual levy of penalty and the order levying penalty has been passed within three years from the expiry of the year to which the assessment related. Therefore if the original assessing authority had passed the impugned order of penalty, the same could not have been questioned. The challenge came to be made only because the order of penalty had been made by the succeeding officer and not by the officer who originally made the assessment. That is the view taken by the Tribunal. But we are not in a position to agree with the Tribunal that the order of penalty could be passed only by the authority who made the assessment and not by the succeeding officer. The fact that the statute itself gives a five year period for passing an order levying the penalty would indicate that the assessing authority having jurisdiction in relation to the assessee can pass an order levying penalty. It may be that the original authority who made the assessment inadvertently omitted to levy a penalty even after finding that there was suppression. In such cases, either the original authority who made the assessment or the succeeding authority could pass the order levying penalty, provided it is done within a five year period referred to in the aforesaid proviso. The prescription of a five year period indicates the intention of the legislature to enable any assessing authority having jurisdiction to levy penalty. It really the legislature intended that the penalty could be levied only by the original authority who made the assessment, it would not have prescribed such a long period as five years for passing an order of penalty. It is no doubt true the exercise of power to levy or not to levy penalty is discretionary. But so long as there is no material to show that the original authority considered the question of levy of penalty but refrained from doing so for any reason, then the succeeding authority cannot go behind the discretion exercised by the original authority and make an order levying penalty by exercising his discretion. But where the original authority did not consider the question of penalty at all the succeeding officer can consider the question of levying penalty and if he finds that the case calls for levying of penalty he can do so, provided he does it within the five year period. We are, therefore, not inclined to agree with the view expressed by the Tribunal that the succeeding officer has no jurisdiction to levy penalty in a case where the original authority has not chosen to levy penalty. However, we are inclined to agree with the ultimate conclusion of the Tribunal that no penalty is called for in this case. The Tribunal has specifically found that the slip on the basis of which the original authority found suppression to the extent of Rs. 15,357.48 did not relate to the assessee's business but it related to the business of another dealer who carried on business in the adjoining premises. The Tribunal also has referred to the fact that though the assessee could not canvass the question as to whether the slip in question related to its business or not, the appeal filed before the Appellate Assistant Commissioner was dismissed as barred by time. Therefore the merits of the assessment could not be canvassed by the assessee. Having regard to the finding of the Tribunal that the slip recovered from the assessee relates to the transaction of the sister concern, the suppression found by the succeeding authority has no basis. Even though the assessment made on the assessee has become final and conclusive, the question whether there was suppression or not could be canvassed by the assessee when the assessing authority proposes to levy penalty on the basis of the suppression found in the assessment order. If the Tribunal has given a finding to the effect that the slip recovered did not relate to the assessee's business but related to the business of a sister concern, it is not possible for us to ignore that finding and uphold the levy of penalty in this case. In view of the finding given by the Tribunal that the slip, which was the basis for finding of the suppression, is found to relate to some other concern, it has to be held that there was no suppression and therefore there was no justification for levying the penalty. Though we are not inclined to agree with the view of the Tribunal that the succeeding officer had no power to levy penalty in respect of the assessment made by his predecessor, we are inclined to agree with the ultimate conclusion of the Tribunal cancelling the levy of penalty. The tax case is therefore dismissed. There will, however, be no order as to costs.
4. Petition dismissed.