Revisional power to impose penalty for the first time extends where assessment omits a Revenue-prejudicial penalty levy.

Section 22-A of the Karnataka Sales Tax Act confers broad revisional power to examine any order or proceeding and pass appropriate consequential orders, including enhancement or modification of assessment. The Supreme Court held that failure by the assessing authority to levy penalty may itself constitute an error prejudicial to Revenue, and the revisional authority is not confined to correcting only matters expressly recorded in the assessment order. After notice and hearing, it may levy penalty for the first time in revision where the circumstances justify such action. The absence of a separate penalty order at assessment therefore does not bar revisional jurisdiction.

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Issues: Whether, under section 22-A of the Karnataka Sales Tax Act, 1957, the revisional authority could for the first time impose penalty under section 18-A when the assessing authority had not levied such penalty in the assessment order.

Analysis: Section 22-A confers broad revisional power on the Additional Commissioner and the Commissioner to examine any order or proceeding and to pass such order as the circumstances justify, including enhancement or modification of assessment and other consequential orders. The Court held that non-levy of penalty by the assessing authority may itself amount to an error prejudicial to the interests of the Revenue, and that the revisional authority is not confined to correcting only what is expressly contained in the assessment order. The Court further held that the statute permits the revisional authority, after notice and hearing, to levy penalty where the circumstances of the case justify such levy, and that the absence of a separate penalty order by the assessing authority does not bar exercise of revisional power.

Conclusion: The revisional authority was competent to levy penalty under section 18-A for the first time in revision, and the challenge to the revisional order failed.

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