Belated return accepted as original assessment bars penalty for best judgment or escaped turnover

A belated return accepted by the assessing authority and assessed on that basis is treated as an original assessment under section 14(1) of the Andhra Pradesh General Sales Tax Act. On that footing, penalty under section 14(3) is not attracted because that provision applies where no return is filed within time and a best judgment assessment is made after notice and inquiry. Section 14(4) also does not apply, because it concerns turnover that escaped assessment, was under-assessed, or was assessed at too low a rate. Where the late return is taken up and completed as the basis of assessment, penalty is not leviable under either provision.

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Issues: Whether penalty could be levied under section 14(3) or section 14(4) of the Andhra Pradesh General Sales Tax Act when a belated return was voluntarily filed, accepted by the assessing authority, and the tax was assessed on that return as an original assessment.

Analysis: Section 14(1) applies where the return submitted under section 13 is accepted as correct and complete, in which event assessment is made on the basis of that return. Section 14(3) applies only where no return is submitted within the prescribed time and the assessing authority, after notice and inquiry, makes a best of judgment assessment, in addition to which penalty may be imposed. Section 14(4) concerns turnover that has escaped assessment, been under-assessed, or assessed at too low a rate, which presupposes that the turnover was not noticed or was omitted in the assessment process. A return filed late but accepted by the assessing authority, with assessment completed on its basis, is treated as an original assessment under section 14(1) and not as a best of judgment assessment or an escaped turnover assessment.

Conclusion: Penalty under section 14(3) or section 14(4) was not leviable on the facts, and the assessee succeeded.

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