1. A simple question arises in this writ petition, viz., whether the department can issue an erratum for collecting a penalty of Rs. 1,050 under the following circumstances. Originally there was a best judgment assessment made on the petitioner-company on 11th November, 1963. There was also a proposal to levy a penalty of Rs. 1,050 and a demand notice for the same was served on the petitioner. Both the original assessment order and the notice proposing levy of penalty were served on the petitioner on 29th November, 1963. Then the petitioner was served with an erratum dated 12th October, 1964, which stated that in the original assessment order though a proposal to levy a penalty was mentioned, there was no actual levy of penalty and as such a penalty of Rs. 1,050 was levied on the petitioner-company. In this writ petition, the petitioner objects to the issue of the erratum, contending that when in the original assessment order there is no actual penalty levied, the subsequent levy of penalty by the issue of an erratum is illegal. In support of his contention, the petitioner relies upon a decision of this Court in State of Madras v. Ramulu Naidu  16 S.T.C. 865 where it was held as follows :
The penalty that is contemplated by Sub-section (3) of Section 12 of the Madras General Sales Tax Act, 1959, depends on and follows a finding as to the incompleteness or incorrectness of the return submitted, and forms part of the proceedings resulting in best judgment assessment. The assessment proceeding based on best judgment under Sub-section (2) is a quasi-judicial proceeding, and so too the levy of penalty under Sub-section (3), and what is contemplated by the two sub-sections is one enquiry for both and therefore the assessing authority while making the assessment by best judgment should also decide at the same time whether a penalty should be levied. Where an officer at the time of making an assessment order was silent about the imposition of the penalty, it must be taken that the assessing authority had applied its mind but did not think it necessary to levy a penalty, and a succeeding assessing authority would have no jurisdiction to reopen the earlier assessment order or act independently of it for purposes of levying penalty.
2. I think there is much force in the contention advanced on behalf of the petitioner for in the assessment order I do not see any penalty actually levied though there is a proposal to levy such penalty. As per the decision cited above, the levy must be made in the order of assessment itself and not by the issue of an erratum. It will be seen that it is clearly admitted by the issue of the erratum that the levy of penalty has not been made in the order of assessment itself and certainly by the issue of an erratum penalty cannot be levied.
3. In the result, this writ petition is allowed and the penalty proceedings quashed. No costs.