Hegde. J. - (1.) These appeals by special leave arise from the decision of the High Court of Madhya Pradesh in a consolidated Reference under Section 44 of the Madhya Pradesh General Sales Tax Act. 1958 (to be hereinafter referred to as the 'State Act,). That reference was made by the Board of Revenue, Gwalior, partly at the instance of the assessee and partly at the instance of the commissioner of Sales Tax. Madhya Pradesh. Four questions of law were referred to the High Court for its decision. They are:"(1) Whether on the facts and circumstances of the case the revised assessment enhancing the taxable turnover under the State law by Rs. 2,50,000/- and the taxable turnover under the Central law by Rs. 1,00,000/- on the basis of the undisputed escape. In the amount of Rs. 31,171.28 by adopting the said amount of escaped turnover as the measure for determining the quantum of enhancement for the whole year was illegal. unjustified or excessive (2) Whether a best judgment assessment could at all be made under Section 19 (1) of the Act or whether revision of the assessment should be confined to the quantum of proved or admitted escaped turnover (3) If the answer to the previous question is that the revision in assessment should be confined only to the quantum of proved or admitted escape in turnover, was the penalty of Rupees 2,000/- imposed on the footing of the revision of the assessment for the whole year legal and justified and (4) Whether on the facts and circumstances of the case the imposition of a penalty under Section 19 (1) of the Madhya Pradesh General Sales Tax Act. 1958 read with Section 9 (3) of the Central Sales Tax Act was not legal -
(2.) The first three questions were referred to the High Court at the instance of the assessment and the last one was referred at the instance of the Commissioner.
(3.) The High Court answered the 1st end the 3rd question in favour of the assessee and the second and the fourth question in favour of the Department. It opined: " ..............our answer to the first question is that the estimate of taxable turnover under the local Act and the Central Act made by the assessing authoritv for the period from 1st November 1959 to 20th October 1960 on the basis of Rs. 31.171.28 as the escaped turn over for a period of 19 days was illegal and unjustified. The escaped turnover proved in the present case is only Rupees 31.171.28 and the assessee is liable to be assessed under both the Acts only on the taxable turnover comprised in the escaped turnover of Rs. 31,171.28. Our answer to the second question is that there can be a best judgment assessment under Section 19 (1) of the local Act. In a best-judgment assessment the quantum of escaped turnover would be that which the assessing authority thinks is proved or is established. In other assessments the quantum of escaped turnover would be the one which the assessing authority finds proved whether on the admission of the assesses or on the material produced at the enquiry in which the assessee has participated. The third question is answered by saying that the imposed penalty of Rs. 2,000l- is in view of our answer to the first question. Not legal. Our answer to the fourth question is that a penalty for escaped assessment under the Central Act can be imposed under Section 19 (1) of the local Act.;