K. Veeraswami, J.
1. The petitioner is a private limited company and seeks to have an order of the Joint Commercial Tax Officer, Harbour Division II, quashed. The assessment to sales tax relates to the assessment year 1965-66. The return for the year was due to be filed on or before 1st May, 1965, but it was actually filed Only on 31st December, 1966. In the meantime, the Joint Commercial Tax Officer started proceedings proposing by his notice dated 28th December, 1966 to determine the taxable turnover by best judgment at a certain figure and to levy, tax at different rates on different items of turnover specified in the notice. It appears that by then the assessing officer had called upon the petitioner to produce accounts and for that purpose granted at its request several adjournments, but finally, he declined to give time beyond 15th December, 1966. The explanation for filing the return belatedly was that the petitioner had to receive figures from various places of business and compile the same to fill in the return. The Joint Commercial Tax Officer made an assessment by an order dated 4th January, 1967 by applying his best judgment. He thought that the return filed before then need not be taken into account and that he was entitled to proceed on the basis that there was no return and applied his best judgment to determine the taxable turnover. He has also levied penalty under Section 12(3) in a sum of Rs. 3,22,391, that being, according to him, one and a half times the tax assessed.
2. The contention for the petitioner is that the order of assessment by best judgment is vitiated on account of the fact that it ignored the return filed before the assessment order was made. We think the ground is well-founded. There is no provision in the Madras General Sales Tax Act, 1959, which forbids filing of a return after a prescribed time or which forbids a return filed belatedly being considered by the assessing officer in the assessment proceedings. We do not understand the scheme of Sub-section (a) of Section 12 to be that once a return has not been filed within the prescribed time, but filed thereafter, it is to be treated as a waste paper not deserving any consideration at the hands of the assessing officer. We take it that the whole object of Sub-section (2) is to provide for two contingencies (1) where a return has not been filed within the prescribed time and (2) where one is filed and it is in the opinion of the assessing officer incorrect or incomplete. In either of these cases the jurisdiction of the officer to assess by best judgment does certainly arise. But this does not mean that where before an assessment order is made a return is filed, though belatedly, the assessing officer is at liberty to ignore it and still apply his best judgment. Such a procedure will be wholly unrealistic and unrelated to the task of finding out the true net chargeable turnover which is the object of Section 12. Though the jurisdiction to assess by best judgment may arise in the event of an asses-see failing to file his return within the prescribed time, nevertheless, the return filed belatedly is bound to be considered by the assessing officer in making the assessment. It necessarily follows from this proposition that he has to look into the return and if he feels that it is incomplete or incorrect, he has to follow the procedure prescribed! by the proviso to Sub-section (2) and give an opportunity to the assessee to prove the completeness or correctness of the return. Where a true and complete return is filed, though out of time, we do not think that the Act compels the assessing officer to ignore it, indulge in imagination and arrive at something which is not related to facts as shown by the return. We are, therefore, of opinion that the order of the assessing officer is vitiated by reason of the fact that he thought that the return filed belatedly was not at all to be taken into consideration and that he was in duty bound to proceed and assess the petitioner by best judgment.
3. Our attention has been invited to an order of this Court Deekan Trading Co. v. The Joint Commercial Tax Officer and Anr. W.P. No. 674 of 1962 in which a contrary view has been taken to the effect that a return filed belatedly is not bound to be considered. With respect, for the reasons already mentioned by us we are unable to share this view. As a matter of fact, a Division Bench of this Court in the State of Madras v. M. S.K. Shahul Hameed (1967) 2 M.L.J. 78 : 19 S.T.C. 288, has held that, though an assesse submitted erroneous provisional, monthly returns, nevertheless, they could not be made the basis of an assessment under Section 12(2) if before an assessment order is made, the assessee informs the assessing officer of the correct return of the turnover. We observed that in such a case the officer was bound to make the assessment only on the basis of such correct return and not on the basis of the provisional returns. No doubt this is not a case of provisional returns, but all the same, the principle of this judgment applies. The very concept of best judgment presupposes the absence of a return, or a return which is incorrect or incomplete. The return submitted cannot, as we mentioned, be ignored of it is filed before the assessment order is made, only on the ground that it has been belatedly filed.
4. On that view of the matter, the propriety of the levy of penalty does not arise for it should fall with the main order of assessment. The order of assessment is quashed and the petition is allowed. The assessing officer will, however, be at liberty to proceed with the assessment having due regard to the return filed. No costs.