JUDGMENT
Ramaswami, C.J. and Choudhary, J.
1. In this case the assessee is a registered dealer carrying on business in sugar, pulses, kirana goods and cotton. He submitted return of turnover for four quarters of 1953-54 to the Assistant Superintendent of Sales Tax, but he did not pay the admitted tax for the last three quarters at the time of submission of the return, and treasury receipts showing payment of the admitted tax were also not filed before the Assistant Superintendent of Sales Tax as required by Section 14(2) of the Bihar Sales Tax Act. The Assistant Superintendent of Sales Tax was not satisfied about the correctness of the return, and, therefore, issued notice upon the assessee under Section 13(2) of the statute. The dealer appeared in response to the notice, but he did not produce any stock book or any ledger account showing the total quantity and price of the various articles purchased and sold during the year. The Assistant Superintendent of Sales Tax, therefore, made an assessment to the best of his judgment under Section 13(3) of the Bihar Sales Tax Act. He also asked the assessee to show cause why a penalty should not be imposed for nonpayment of the sales tax for the previous three quarters. After hearing the assessee, the Assistant Superintendent of Sales Tax levied a penalty of Rs. 1,000 upon the assessee. The view taken by the Assistant Superintendent of Sales Tax was that the gross turnover of the assessee should be increased by 25 per cent, because the account books were not produced. The assessee took the matter in appeal before the Deputy Commissioner of Sales Tax, who reduced the penalty to Rs. 500. The Deputy Commissioner of Sales Tax also reduced the enhancement of the turnover from 25 per cent, to 10 per cent. He further observed that the penalty should be imposed not under Section 12(3) of the Bihar Sales Tax Act, but under Section 14(3) of that Act and that the Assistant Superintendent of Sales Tax made a clerical mistake in saying that the penalty was imposed under Section 12(3) of the Act. The assessee took the matter in revision before the Board of Revenue which allowed the revision petition and set aside the order of assessment and also the order of imposition of penalty. The Board of Revenue observed that “while the failure to maintain a stock book of sugar might raise some suspicion and while the kata bahi produced before the Deputy Commissioner should have been produced much earlier and may have even been manipulated, in the absence of corroborative evidence to convert the suspicion into reasonable certainty, it would be unduly hard to reject the books of the petitioner as unreliable.”
2. The Board further observed as follows :
“Oh the basis of the materials on the record the petitioner is entitled to the benefit of doubt and he should be assessed according to his books of account and his return. The penalty has naturally to be set aside. Besides no penalty can be imposed merely because the payment of tax has been delayed.
3. As directed by the High Court the Board of Revenue has stated a case on the following questions of law :
(1) Whether in the circumstances of this case the assessing officer was justified in making the assessment to the best of his judgment?
(2) Whether in the facts and circumstances of this case the penalty imposed for non-payment of the admitted tax was legally valid?
4. With regard to the first question the argument of the learned Government Pleader is that the Assistant Superintendent of Sales Tax was justified in making the assessment under Section 13(3) of the Bihar Sales Tax Act to the best of his judgment in the circumstances of this case. It was pointed out that the assessee did not produce the stock book, nor any ledger account from which the total quantity and value of the various articles purchased and sold could be verified. It was also pointed out that the assessee did not maintain any stock register of sugar. The absence of this register was a circumstance which indicated that no reliance could be placed on the account books of the assessee for the period in question. It was also argued by the learned Government Pleader that the transaction of the dealer for the period in question amounted to over Rs. 3,95,976 and that it was not probable that the assessee would not maintain a stock register showing the quantity of sugar in stock. It was also pointed out that the assessee did not furnish the annual consolidated return in respect of the whole year, as required by Rule 22 of the Bihar Sales Tax Rules. In our opinion, the argument of the learned Government Pleader is well founded and must be accepted as correct. We think that the Board of Revenue was not justified in holding that the Assistant Superintendent of Sales Tax and Deputy Commissioner of Sales Tax were erroneous in making an assessment under Section 13(3) of the Bihar Sales Tax Act. The Board of Revenue has observed :-
I am inclined to think that while the failure to maintain the stock book of sugar might raise some suspicion and while the kata bahi produced before the learned Deputy Commissioner should have been produced earlier and may have even been manipulated, in the absence of corroborative evidence to convert the suspicion into reasonable certainty, it would be unduly hard to reject the books of the petitioner as unreliable.
5. In our opinion the Board of Revenue has committed an error of law in holding that though the failure to maintain a stock book was a suspicious circumstance and that the kata bahi might have been manipulated, still the Assistant Superintendent of Sales Tax and the Deputy Commissioner of Sales Tax were not justified in rejecting the books of account and making an assessment to the best of their judgment. If the Sales Tax Authorities have reason to suspect that the account books of the assessee are not reliable, or that the assessee has suppressed certain material document relating to the account books, it is open to them under the provision of Section 13(3) of the Bihar Sales Tax Act to make an assessment to the best of their judgment. For these reasons we hold that the first question referred by the Board of Revenue should be answered against the assessee and in favour of the State of Bihar and it must be held that in the circumstances of this case the Assistant Superintendent of Sales Tax and the Deputy Commissioner of Sales Tax were justified in making the assessment to the best of their judgment under Section 13(3) of the Bihar Sales Tax Act. With regard to the second question of law we are of opinion that in the facts and circumstances of this case the penalty imposed for non-payment of the admitted tax was legally valid. It is the admitted position in this case that the assessee did not make payment of the sales tax admittedly due from him according to the return under the provisions of Section 14(2) of the Bihar Sales Tax Act which states as follows:
14. (2) Before any registered dealer furnishes the returns required by Sub-section (1) of Section 12, he shall, in the prescribed manner, pay into a Government treasury the full amount of tax due from him under this Act according to such returns and shall furnish, along with the returns, a receipt from such treasury showing the payment of such amount.
5. Section 14(3a) of the Bihar Sales Tax Act provides as follows :
14. (3a) Where any registered dealer fails without any reasonable cause to make payment of the tax or extra amount of the tax due from him according to the return or revised return furnished under Sub-section (1) or (2) of Section 12, the Commissioner may direct that the dealer shall, by way of penalty, pay a sum not exceeding five rupees for every day after the date prescribed under the said section, during which the dealer has failed to make payment.
6.. It is, therefore, manifest in the present case that the assessee is liable to be saddled with penalty under Section 14(3a) of the Bihar Sales Tax Act because he has failed to make the payment of the admitted tax due from him at the time of the submission of the return. Learned counsel for the assessee did not controvert this legal position. The point taken by him, however, is that, the penalty was imposed by the Assistant Superintendent of Sales Tax not under Section 14(3a) but under Section 12(3) of the Bihar Sales Tax Act, which is to the following effect:
12. (3) If a registered dealer fails, without any reasonable cause, to furnish any return within a month of the due date, the Commissioner may direct that, the dealer shall, by way of penalty, pay a sum not exceeding five rupees for every day after the due date during which the dealer fails to submit the required return.
7. It. is true that the Assistant Superintendent of Sales Tax imposed the penalty apparently under Section 12(3) of the Act. This appears to be a clerical mistake because the admitted position is that the Assistant Superintendent of Sales Tax. did issue a notice upon the assessee asking him to show cause why action should not be taken for non-payment of the admitted tax for the last three quarters. It is, therefore, clear that the Assistant Superintendent of Sales Tax made a clerical mistake in mentioning Section 12(3) in the notice and not Section 14(3a). There is no prejudice caused to the assessee because he was aware of the true position and he showed cause for non-payment of the admitted tax for the last three quarters. The explanation of the assessee was that he could not pay the tax “on account of the falling price of sugar and his indebtedness to others.” In our opinion, therefore, the imposition of penalty by the Deputy Commissioner of Sales Tax under Section 14(3a) of the Bihar Sales Tax Act is legally valid and is not vitiated by any illegality. We, therefore, answer the question of law referred by the Board of Revenue against the assessee and in favour of the State of Bihar.
8. The assessee must pay the cost of this reference. Hearing fee Rs. 250-