JUDGMENT

JASWANT SINGH, J. :— This is an appeal by Special Leave against the judgment and order dated May, 4 1973 passed by the High Court of Madras in T.C. NO. 223 of 1969.

2. It appears that the appellants who are dealers in refrigerators spare parts etc. submitted a return for the year 1964-65 to the Joint Commercial Tax Officer, Madras (hereinafter called the Assessing Authority) under the Madras General Sales Tax Act, 1959 (hereinafter referred to as the Act) showing a total taxable turnover of Rupees 6,41,031.77. On checking the account of the appellants, the Assessing Authority by its order dated January 31, 1966 made an addition of Rs. 33,710.88 to the turnover reported by the appellants and assessed the sales Tax on the turnover of Rupees 6,74,742.65. The appellants did not choose to prefer an appeal against this assessment.

3. On January 7, 1967, the Deputy Commissioner, Commercial Taxes, Madras Division, in exercise of his suo motu power of revision under Section 32 of the Act issued a notice to the appellants calling upon them to show cause why a penalty of Rs. 5,056/- on the aforesaid undisclosed turnover of Rs. 33,710.88 be not levied against them.

4. In response to the notice, the appellants submitted their objections challenging the jurisdiction of the Deputy Commissioner to levy the proposed penalty and requested him to drop the proceedings. In the alternative, they prayed that they should be granted exemption in respect of Rs. 6,32,142/- which represented works contracts for complete fabrication, erection and installation of air-conditioning plants with their employees which did not amount to sale of goods.

5. The Deputy Commissioner negatived the contention of the appellants regarding his jurisdiction to levy the penalty, and revising the assessment levied a penalty of Rupees 3,371/- under Section 12(3) of the Act. The Deputy Commissioner also declined to allow the aforesaid exemption claimed by the appellants on the ground that they did not file appeals in the regular course as contemplated by the provisions of the Act.

6. The appellants went up in appeal from this order to the Sales Tax Appellate Tribunal, Madras, who substantially allowed the appeal, cancelled the penalty and acting on the statement of transactions filed before him by the appellants allowed on exemption from tax on a turnover of Rs. 5,99,468/- as representing the works contracts holding that as suo motu power of revision could be exercised by the Deputy Commissioner both for the benefit of the State and the tax-payer, he should have gone into the question of exemption and set right the assessment by allowing the exemption on the turnover relating the works contracts.

7. Aggrieved by this order of the Sales Tax Appellant Tribunal, the respondent filed a petition under Section 38 of the Act to the High Court of Judicature at Madras for revision of the order of the Sales Tax Appellate Tribunal. The High Court allowed the revision petition in part and set aside the order of the Tribunal in so far as it related to the deletion of the turnover of Rupees, 5,99,468/-.

8. Counsel for the appellants has urged before us that as the suo motu power of revision under Section 32 of the Act is wide enough and can be exercised both in favour of the revenue as well as the assessee regardless of the fact whether the latter has filed an appeal against the order of assessment or not, the High Court ought not to have reversed the order of the Sales Tax Appellate Tribunal in respect of the turnover of Rs. 5,99,468/- which related to works contracts.

9. Two questions arise for determination in this appeal. Firstly is the scope of the suo motu power under Section 32 of the Act. Secondly, whether the Deputy Commissioner rightly refused to exercise discretion under Sec. 32 of the Act in favour of the appellants.

10. For the determination of the first question, it is necessary to refer of Section 32 of the Act which runs as follows :-

"32 Special powers of the Deputy Commissi