- (1.) THIS is a revision application by the assessee under Section 14 (2) of the Rajasthan Sales Tax Act against order dated 10-2-66 by the Deputy Commissioner, Commercial Taxes (Appeals) Ajmer in respect of assessment for the period 1-1-62 to 31-12-62 in the case of Messrs. Laxmi Automobiles of Bhilwara.
(2.) THE assessing authority had enhanced the turnover from Rs. 24054. 29 to Rs. 40,000 on the basis of a 'diary' containing entries pertaining to business transactions, seized from the dealer's business premises. On appeal, the Deputy Commissioner reduced the enhancement by a sum of Rs. 6,000/-, reducing the tax by Rs. 420/ -. THE assessing authority had imposed penalties under sec. 16 (l) (c) non-submission of quarterly returns Rs. 200/'-, sec. 16 (1 ) (e) concealment of turnover, Rs. 1500/- and sec, !6 (l) (g) contravention of R. 42 - Rs. 50/ -. THE reference to clauses of sec. 16 is as they stood during the relevant period. THE Dy. Commissioner did not consider the question relating to penalties with the observation that counsel for the assessee-appellant did not press any point other than that pertaining to enhancement of turnover. Learned counsel for the assessee argued that there is mandatory provision in R. 54 that reasonable opportunity of being heard must be given to a dealer before an order imposing a penalty u/s. 16 of the Rajasthan S. T. Act is passed. The provision has been interpreted to mean that notice in writing should be given before imposing penalty. He cited 1967 RRD 213 (National Brick Co. vs. State) and 1969 RRD 490 (De'lite Steel Furniture Products vs. State) in support of the contention. He said that no notice had been given in the present case before imposing penalties. In regard to the penalty under Sec. 15 (1 ) (c), concealment of turnover, he further argued that when the Deputy Commissioner had reduced the amount of enhancement in turnover, i. e. the amount deemed to have been concealed, the penalty should also have been proportionately reduced. Regarding the Deputy Commissioner's observation that the point had not been pressed by counsel for the assessee before him, learned counsel said that no concession had been made by the assessee's counsel. The Deputy Commissioner himself had only said that points other than that regarding enhancement of turnover were not pressed. The point regarding penalties being excessive and illegal was in the memorandum of appeal submitted to the Deputy Commissioner. Even if the counsel appearing before the Deputy Commissioner failed to press the question, the Deputy Commissioner should have examined the legality of the penalties, raised in the memorandum of appeal. In regard to the enhancement itself, learned counsel said that the enhancement was not on any reasonable basis. The learned Deputy Government Advocate said that the Deputy Commissioner did not go into the question of penalties as it was not pressed before him. The Deputy Commissioner's observation that it was not pressed should be accepted as correct, specially when there is no affidavit by counsel concerned or the assessee that the observation is factually incorrect. Regarding Rule 54 about reasonable opportunity being given before imposition of penalty, he said that firstly this does not mean that a separate notice in writing should necessarily be given. All that was necessary was that adequate opportunity should be given to the assessee to answer, before penalty was imposed. The assessment order shows that adequate opportunity was given. I have given due consideration to the matter. So far as the enhancement in turnover is concerned, the Deputy Commissioner had observed as follows: - ". . . . . . the taxable turnover of the appellant has been enhanced by Rs. 15, 945/ -. The appellant produced several purchase vouchers before me today. On perusal of these vouchers it is found that certain goods were purchased by the appellant from the registered dealers of Rajasthan after payment of tax. The sales of such goods have also not been accounted for in the regular account books maintained by him On scrutinising certain bills the sale of such taxable goods is estimated at Rs. 6,000/-, the deduction of which should be allowed to the appellant from the enhanced turnover of Rs. 15,945. . . . . . " It is quite clear that the Deputy Commissioner examined the documents before him and on their basis came to a finding that reduction to the extent of Rs. 6,000/- (involving a reduction of Rs. 420/- in tax) should be made. I see no reason to disagree or interfere with this finding, based as it is on examination of the documents. About the penalties, the assessment order shows that due opportunity was given so far as penalties under sec. 16 (l) (e) and 16 (l) (g) are concerned. There is reference in it to various notices and summonses. The file before me does not contain copies of notices etc. but obviously all the parts of the assessment record are not here. I have no reason to disbelieve the facts recorded in the assessment order. In any case, so far as the penalties under sec. 16 (l) (g) and 16 (l) (e) are concerned the matter was argued before me on merits also. So far as the penalty of Rs. 50/-under 16 (l) (g) non-compliance with Rule 42, relating to maintenance of correct account, is concerned, no cogent argument has been advanced even before* me, to enable me to hold that the penalty was unjustified or excessive. Correct account had obviously not been maintained by the dealer, and the amount of penalty imposed is not heavy] I see no reason to reduce it. Regarding the penalty under sec. 16 (1 ) (e) concealment of turnover, I agree that proportionate reduction in penalty must be made with reference to the reduction in tax liability, pertaining to concealed turnover, made by the Deputy Commissioner. Penalty imposed was Rs. 1500/ against tax of Rs. 770/- on concealed turnover as determined by the assessing authority. As a reduction of Rs. 420/-was made by the Deputy Commissioner in the tax on the basis of reduction made by him in the estimates of concealed turnover, a reduction of Rs. 818/- should be allowed in the amount of penalty under sec. 16 (l) (e ). Regarding the penalty under sec. I6 (l) (e), I find no mention in the assessment order regarding any opportunity having been given to the assessee to explain. This penalty must, therefore, be set aside as not having been imposed after observing the procedure prescribed under law. The assessing authority will be free to take fresh proceedings regarding this penalty, after giving to the dealer due opportunity of being heard. The revision application is partially accepted to the extent indicated in paras 10 and 11. . ;