The Revisional Authority cannot impose a penalty for the first time if the Assessing Authority has not invoked its powers to impose the penalty.

Ashok Bhan, J.

1. Sales Tax Tribunal, Haryana, (hereinafter referred to as the Tribunal) has referred the following question of law, arising out of the order of the Tribunal, for opinion of this Court :-

"Whether in the facts and circumstances of the case the Deputy Excise and Taxation Commissioner, Ambala, exercising the revisional authority Under Section 40 of the HGST Act was within his powers to direct the Assessing Authority to initiate penal proceedings against the respondents Under Section 10(7) of the Punjab General Sales Tax Act, ?"

2. The above question arises out of the following facts. M/s Basaunda Singh Waryam Singh assessee (hereinafter referred to as the assessee) filed four quarterly returns for the assessment year 1970-71. under the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Punjab Act) showing the total turnover of Rs. 1,28,307.62. It was detected that with the Department of Income Tax, assessee had shown the total turnover of his business at Rs. 4,98,515.46. When confronted with this situation, assessee filed a revised statement of accounts disclosing his gross turnover at Rs. 4,98,515.46 as against the return figure of Rs. 1,28,307.62. Taking the gross receipt at Rs. 4,98,515.46, the Assessing Authority framed the assessment. Demand Notice and Challan for Rs. 5,168.82 plus Rs. 10/- on account of penalty for late filing of the return was imposed Under Section 10(6) of the Punjab Act, No penalty proceedings Under Section 10(7) of the Punjab Act for filing incorrect return were initiated. Assessment order was passed on 31.12.1973. Appeal filed by the assessee against the order of assessment was dismissed on 18.4.1974.

3. In the meantime, Haryana General Sales Tax Act, 1973 (hereinafter referred to as the Haryana Act) came into force. Revisional Authority, in exercise of its powers under record of the proceedings of the assessment order dated 31.12.1973 passed by the Assessing Authority for the purposes of satisfying itself as to the legality and propriety of the order regarding non imposition of penalty Under Section 10(7) of the Punjab Act. Section 10(7) of the Punjab Act corresponds to Section 48 of the Haryana Act. Assessee appeared before the Revisional Authority and pleaded that the assessment proceedings and the penalty proceedings are two distinct proceedings and since the Assessing Authority had not initiated the proceedings for imposition of penalty, the Revisional Authority could not issue notice Under Section 40 sub-clause (2) of the Haryana Act, for examining the legality and propriety of any proceedings or the orders passed therein. This plea of the assessee was not accepted. Revisional Authority held that the orders passed by the Assessing Authority suffered from impropriety inasmuch as the penalty Under Section 10(7) of the Punjab Act has not been imposed. Case was remanded to the Assessing Authority with a direction to initiate proceedings Under Section 10(7) of the Punjab Act and finalise the same on merits.

4. Assessee, being aggrieved against the order of the Revisional Authority, filed an appeal before the Tribunal. Tribunal accepted the. appeal filed by the assessee and held that the Revisional Authority could not travel beyond the proceedings of the Assessing Authority. Since, the penalty proceedings had not been initiated by the Assessing Authority, Revisional Authority did not have the jurisdiction to invoke suo moto powers and take action and go into the legality and propriety of the proceedings of the orders made therein. Revenue filed an application Under Section 42(1) of the Haryana Act, for making a reference on the question of law referred to in the earlier part of the judgment, for opinion to this Court. On the said application, the Tribunal referred the aforesaid question of law.

5. As against this, the case of the Revenue is that the Revisional Authority could go into the question regarding imposition of penalty as the penalty proceedings