1. This is an appeal against the order of the Board of Revenue setting aside the assessments made against the appellant for the assessment years 1962-63 and 1963-64 under Section 12(2) of the Tamil Nadu General Sales Tax Act, 1959, directing the assessing authority to pass fresh orders of assessment as also orders regarding the penalty.
2. The assessee in this case has been doing business in foreign goods like ready-made garments, biscuits, Horlicks, soaps, electrical goods, flasks, etc., but he did not register himself as a dealer under the Tamil Nadu General Sales Tax Act, 1959. He also did not submit any return for his business in any of the previous years. However, his place of business was inspected by the special departmental staff and during that inspection, certain slips and anamath accounts were recovered. On verification of those anamath accounts and slips, it was found that the assessee had during the years 1962-63 and 1963-64 taxable turnover of Rs. 10,920.71 and Rs. 19,725.62 respectively.
3. The assessing authority after issuing the pre-assessment notices, assessed the appellant on the said turnovers for those two years, under Section 12(2) of the Act. While passing the order of assessment on 15th January, 1965, he, however, did not consider the question as to whether the order for levy of penalty should be made in respect of these two years under Section 12(3) of the Act. But the assessing authority issued a notice on 1st March, 1965, proposing to levy a penalty at 1| times of tax levied in respect of both these years, and after hearing the objections from the assessee, he confirmed the proposal to levy the penalty.
4. Thereafter, the assessee filed an appeal before the appellate authority and the appellate authority set aside the orders relating to penalty on the ground that the power to levy a penalty contained in Section 12(3) has not been invoked when making the assessment as contemplated by Section 12(3) of the Act, and that, therefore, an independent order passed by the assessing authority levying penalty for the two assessment years long after the assessments had been completed could not be sustained. It is in these circumstances, the Board of Revenue exercised its suo motu power and set aside the original orders of assessments made by the assessing authority so as to enable him to invoke the power under Section 12(2) and 12(3) simultaneously and to pass orders both in relation to assessment and penalty.
5. The learned counsel for the appellant in this case contends before us that the Board of Revenue is not justified in setting aside the order of assessment passed under Section 12(2) only with a view to enable the assessing authority to invoke the power under Section 12(3), which he had not done when making the assessment. According to the learned counsel, unless the Board finds some justification/ to interfere with the orders of assessments passed under Section 12(2), it cannot set aside the said orders for a collateral and oblique purpose of enabling the assessing authority to invoke the independent power of levying penalty under Section 12(3).
6. We are inclined to agree with the said contention put forward on behalf of the appellant. The power under Section 12(2) is a power to make the assessment and that power has been found to have been exercised properly. Neither the appellate authority nor the Board of Revenue has doubted the correctness of the orders of assessment passed against the appellant in respect of these two years. The x orders of assessment passed under Section 12(2), which alone are the subject-matters of revision by the Board, have been found to be otherwise legal, and, therefore, they cannot be set aside merely on the ground that the assessing officer overlooked the provisions of Section 12(3) and failed to exercise that power while making the assessments. We cannot, therefore, agree with the Board of Revenue in setting aside the orders of assessment in this case for the reasons set out above. The tax case is, therefore, allowed, but under the circumstances no costs.