RAMANUJAM, J.

The respondent herein is a dealer in firewood, and he submitted a return showing a taxable turnover of Rs. 1, 36, 257.99 for the assessment year 1961-62. But, before the final assessment could be made, there was an inspection of his place of business, as a result of which certain anamath account books were recovered. Based on the entries in the said anamath accounts, the assessing officer rejected the account books of the respondent and determined, to the best of his judgment, the taxable turnover to be at Rs. 2, 37, 548.48, thereby making an addition of Rs. 1, 01, 290.49 to the returned turnover. At the time of making that assessment, the assessing officer did not invoke his power under section 12(3) of the Madras General Sales Tax Act for levying a penalty for submission of an incorrect and false return.

The order of the assessing authority was later revised by the Deputy Commissioner by enhancing the taxable turnover of the respondent to Rs. 3, 00, 000, and this resulted in an addition of Rs. 1, 63, 742.01 to the turnover returned by the respondent. The enhancement made by the Deputy Commissioner was based on a revised estimate made by him on the basis of the same material which was before the assessing authority. The Deputy Commissioner, as a part of his revisional order, levied a penalty of Rs. 2, 100, in exercise of the power under section 12(3) of the Act. The assessee, thereupon, filed an appeal before the Sales Tax Appellate Tribunal questioning the addition made by the revising authority, as also the levy of penalty. The Tribunal went into the merits of the assessment, and on the materials it upheld the estimate of the taxable turnover made by the Deputy Commissioner. But, the Tribunal has chosen to set aside the order of the Deputy Commissioner levying penalty on the ground that, while the assessing authority has not chosen to exercise the power under section 12(3), the Deputy Commissioner cannot exercise the said power in exercise of his revisional jurisdiction. That view of the Tribunal has been challenged here by the State. Therefore, the only question that arises in this case is as to whether the Deputy Commissioner, while exercising revisional jurisdiction under section 32 of the Madras General Sales Tax Act, 1959, can invoke the power under section 12(3) for the first time.Section 12(3) of the Act empowers the assessing authority to levy a penalty when making any assessment under sub-section (2). In this case, the assessing officer, while making an assessment order under section 12(2), has not invoked the power under sub-section (3). Even in the pre-assessment notice, he has not proposed to exercise the power under section 12(3). It is in those circumstances, the Deputy Commissioner has chosen to exercise the power under section 12(3) while exercising his revisional jurisdiction under section 32.

Dealing with the scope of section 12(3) of the Act, this court in State of Madras v. Ramulu Naidu expressed that where an officer, at the time of making an assessment order, was silent about imposition of penalty, it must be taken that the assessing authority had applied its mind and did not think it necessary to levy a penalty and that the same assessing authority or the succeeding assessing authority would have no jurisdiction to reopen the earlier assessment order for the purpose of levying penalty. This decision was considered in a later decision in M. Ramaswamy Pillai v. State of Madras and distinguished. In that case, the assessing authority, in his pre-assessment notice, had specifically proposed to levy a penalty. After receiving the objections from the assessee, he passed an assessment order, but did not express his views on the question of penalty. The question arose whether a revisional authority such as the Deputy Commissioner, while revising the order of the assessing authority, could impose the penalty contemplated under section 12(3). The court, in that case, took the view that th