VENKATESAM, J.

This tax revision case is preferred by the State of Andhra Pradesh against the order of the Sales Tax Appellate Tribunal in Tribunal Appeal No. 256 of 1960 on its file. The relevant facts are these.

The assessee-respondent opened a branch office at Masulipatnam on 14th July, 1958, as dealers in Usha Sewing Machines and their spare parts. For the assessment year 1958-59 they failed to submit a return in Form A of the estimated turnover, or Form A-1 of the actual turnover. They, however, got themselves registered as dealers soon after they opened the branch at Masulipatnam. The concerned Assistant Commercial Tax Officer inspected the business premises of the assessee and checked the accounts, and found the turnover relating to their sales for the year ending March, 1959, to be Rs. 17,177-37 nP. Thereafter, the dealers voluntarily filed the annual return in Form A-1 on 17th August, 1959, disclosing the turnover of Rs. 17,177-37 nP. Subsequently, the Assistant Commercial Tax Officer, Bandar, who was the assessing authority, called on the assessee to produce his accounts, and, after examining them, accepted the return made by the assessee as complete and correct, and by his order dated 25th September, 1959, assessed him to tax at Rs. 340-56 nP., which was paid.

The assessing authority, after completing the assessment, issued a show-cause notice why penalty at 1 1/2 times the tax, amounting to Rs. 515-31 nP., should not be levied under section 14(3) of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as "the Act"). The Commercial Tax Officer reduced the penalty to Rs. 343 and against that order the matter was carried in appeal to the Appellate Tribunal.

Two members of the Tribunal took the view that, in a case like this, where the return has been accepted, section 14(1) of the Act will apply, and there is no question of levying any penalty when an assessment is made on the basis of an accepted return, and that the levy was, therefore, without jurisdiction. The learned Chairman of the Tribunal took the view that, as the appellant had not filed the return as contemplated under section 13, he would necessarily come under section 14(4) for levy of assessment and penalty, and that the penalty levied is valid irrespective of the fact whether it is an original assessment or not. The opinion of the majority was made the final order of the Tribunal, and the penalty was set aside.

It is the correctness of this order that is challenged by the State before us.

The contention raised on behalf of the Department is that penalty can be levied under section 14(3) of the Act in cases where the returns are not submitted within time. As the validity of this contention depends on the construction of section 14(3), the section may usefully be extracted.

"14. (1) If the assessing authority is satisfied that any return submitted under section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof; but if the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer. An assessment under this section shall be made only within a period of four years from the expiry of the year to which the assessment relates.

(2) When making an assessment to the best of judgment under sub-section (1) the assessing authority may also direct the dealer to pay in addition to the tax assessed, a penalty not exceeding one and half times the tax due on the turnover that was not disclosed by the dealer in his return.

(3) If no return is submitted by any dealer liable to tax under this Act before the date prescribed in that behalf, the assessing authority may, at any time within a period of four years from the expiry of the year to which assessment r