ORDER

T.R.RAVI, J.

The petitioner is a firm doing business under the name and style 'Chinnan Sons Jewellers'. The Intelligence Officer Squad No.IV, Malappuram conducted an inspection at the business premises of the petitioner. On the basis of the shop inspection report and the verification of the books of accounts, the Intelligence Officer proposed to impose a penalty of Rs.3,23,666/- being double the amount of tax, on a total sales suppression of Rs.40,45,264.97. The suppression was noted under four heads. An unaccounted sale of 2975 gms. of gold ornaments, a difference of 111.755 gms. of gold ornaments between actual stock and the stock register, an excess cash balance of Rs.17,922.52 and Rs.29,994.72 worth of sale bills which were undated, were the four discrepancies noted.

2. According to the petitioner, the 2975 gms. of gold ornaments which were treated as unaccounted sales, were actually sent for 'hall marking' and this fact had been noted in the stock book. Regarding the variation of 111.755 gms, the petitioner submits that, the total stock of ornaments available was 69,689.640 gms., which were weighed in small lots totalling 50 numbers. The explanation of the petitioner is th