Prakash Krishna, J. - (1.) THE present revision arises out of penalty proceedings under section 15-A (1) (C) of the U.P. Trade Tax Act for the assessment year 1968-1969. THE applicant, a partnership firm, disclosed its total sales of imported kerosene oil at Rs.1,67,155-50. THE account book, during the assessment proceeding was accepted by the assessing authority. After the completion of assessment order some information was received by the Department to the effect that the applicant has imported kerosene oil amounting to Rs.7,06,921/- from Indian Oil Corporation in the aforesaid assessment year. THE department initiated reassessment proceeding, in order to assess the escaped turnover, under section 21 of U.P. Sales Tax Act. THE reassessment proceeding was contested by the applicant. However, reassessment order creating additional demand was passed by the Assessing Authority. THE reassessment order was successfully challenged before the Appellate Authority. THE Appellate Authority set aside the reassessment order on a short ground that the reassessment notice was not validly served on the dealer and as such very initirction of reassessment proceeding was without jurisdiction. THE reassessment notice was served on one Krishna Bhagwan, who was the agent of the assessee firm. But the firm stood dissolved w.e.f. 7th of November 1971 and the notice was served on Shri Krishna Bhagwan on 29th March 1973 i.e. after the dissolution of the firm. This was held to be invalid service and consequently the proceeding under section 21 was dropped by the First Appellate Authority. This order was confirmed by the tribunal as well as by the High Court in Sales Tax Revision No.309 of 1987. THE judgment of the High Court is dated 21st of July 1988 and is also reported in 1988 U.P.T.C. 1104, C.S.T. vs. S/S. Bharat Oil Company. Undaunted by the failure in the reassessment proceeding, the department thereafter in the month of April 1989 levied penalty under section 15 (A)(I)(C) of the Act by the order dated 19th April 1989, to the tune of Rs.94,500/-. THE assessing Officer rejected the contention of the dealer that no penalty could be levied as the reassessment order passed under Section 21 of the Act has been finally set aside. He concluded that on the basis of the information it is established that the dealer has imported Kerosene worth Rs.7,06,921/-. This order was confirmed by the Appellate Authority. THE tribunal has substantially confirmed the penalty order except that it has reduced the quantum of penalty to Rs.76,900/-.
(2.) CHALLENGING the aforesaid penalty order the present revision has been filed. Heard the leaned counsel for the parties and perused the record. The learned counsel for the applicant has submitted that the department has accepted the account books of the dealer applicant in the assessment proceeding and that the reassessment order has been set aside, resultantly only the assessment order accepting the account books of the applicant is in operation. Therefore, the levy of penalty on the ground that the dealer has concealed the particulars of his turn over or has deliberately furnished inaccurate particulars of such turn over does not arise. In contra, the learned standing counsel has submitted that notwithstanding the fall of reassessment order framed under section 21, the fact remains that the dealer has imported kerosene oil worth Rs.7,06,921/- and therefore the department has rightly levied the penalty. Section 15-A of the U.P. Sales Tax Act provides the levy of penalties in certain cases. Indisputably the penalty proceeding was initiated by the Department after setting aside of the reassessment order. Before the tribunal a controversy was raised by the applicant that under unamended clause C of Section 15-A (1) no penalty could be imposed for concealment of the turnover or deliberate furnishing of inaccurate particulars of such turn over. However, no such argument was raised before me. The learned counsel for the applicant proceeded with the assumption that the amended clause (C) of Section 15-A would be attracted if at all there is concealment of particulars of the turn over or deliberate furnishing of inaccurate particulars of such turn over.
(3.) CLAUSE (C) of Section 15-A makes a provision for levy of penalty in the case of deliberate furnishing of inaccurate particulars of turn over or of concealment of turn over. The burden to establish necessary ingredients of concealment and deliberate furnishing of inaccurate particulars is on the department. The Supreme court in the case of Narain Das Suraj Bhan vs. C.S.T. (1968) 21 S.T.C. 104 has held that the concealment of furnishing inaccurate particulars must be in the return furnished under section 7 of the Act. In that case the Supreme Court was examining a question as to whether a penalty for inaccurate particulars of such turn over (under unamended clause (B), which is now equivalent to amended clause (C) will refer to return filed under section 7 or section 21 of the Act. It was held that even if in response to a notice issued under section 21 (1), the assessee files a fresh statement of its turnover it is still liable to be penalized under section 15-A for concealment or deliberate furnishing of inaccurate particulars of turn over in return filed under section 7. In the present case the fact remains that the disclosed turnover has been accepted by the Department in the assessment proceedings. The said assessment order accepting the account books of the dealer is still intact and the reassessment order has been set aside. Before any penalty can be levied the turn over has to be assessed as concealed turnover in the assessment order of an assessee. Therefore, in penalty proceedings, the Assessing authority has to probe into and decide whether there has been any concealment of turn over. The said finding could be recorded in the assessment proceedings only which includes reassessment also. But it does not include the penalty proceeding itself. The turnover has to be assessed in the assessment order otherwise the passing of the assessment order would become meaningless. If for one reason or the other the disclosed turn over has been accepted in the assessment proceeding including reassessment, I am of the opinion that there is no question of concealment of turnover or of furnishing inaccurate particulars of such turn over. The veracity of the return filed by the dealer having been accepted by the Department in assessment proceeding, the department cannot turn around and say in the penalty proceeding that the return filed by the dealer under section 7 of the Act is inaccurate as it has concealed the turnover or deliberately furnished inaccurate particulars of such turn over. Section 7 (2) of the U.P. Sales Tax Act says that the Assessing Authority, after such inquiry as he considers necessary, if he is satisfied with any returns submitted under sub section (1) are correct and complete, he shall assess the tax on the basis thereof. It follows that the returns filed by the dealer applicant under sub section (1) were accepted as correct and complete, as its account books were accepted. The word "assessment" is comprehensive word and can denote the entirety of proceedings which are taken with regard to it. The assessment proceedings are quasi judicial proceedings in nature and a quasi judicial order can be set aside or modified in accordance with the prescribed procedure. The Assessing authority, in penalty proceedings can not discard the assessment order and come to the conclusion that the return submitted by the dealer was either incorrect or incomplete. To put it differently, in penalty proceedings the authority concerned is bound to give due regard to the assessment order, accepting the account books. There is another aspect of the matter. Section 15-A (1) (C) is the substantive provision and it defines various omissions and commissions for the purposes of levy of penalty, under clause (a) to (r). Thereafter, sub clause (II) of clause (r) has made a provision for determination of quantum of penalty in case referred to any clauses (C), .......... It provides that the quantum of penalty would be, a sum not less than 50% but not exceeding 200% of the amount of the amount of tax which would thereby have been avoided. This Court in the case of Satya Pal Singh Brick Field Vs. Commissioner of Sales Tax 1986 U.P.T.C. 1301, in para 17 has held that in cases of concealment of turn over the liability to pay the tax on a dealer would be the difference between the tax, tax as returned and the tax as assessed. In the present case there is no difference in between the tax, tax as returned and the tax as assessed, as the account books of the dealer stand accepted and the reassessment order stands set aside.;