Appellate penalty power cannot be exercised for the first time unless the statute expressly grants original penal jurisdiction.

An appellate authority exercising powers under section 38(5) of the Madhya Pradesh General Sales Tax Act, 1958 does not acquire original jurisdiction to impose a penalty for the first time under section 17(3). The governing principle is that penal jurisdiction must be expressly conferred by statute and cannot be assumed at the appellate stage. On that basis, the view that a penalty could not be initiated and imposed for the first time in appeal was affirmed as consistent with the legal position, and the Department's contrary stance failed.

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Issues: Whether, in exercise of appellate powers under section 38(5) of the Madhya Pradesh General Sales Tax Act, 1958, the appellate authority could impose penalty for the first time under section 17(3) of the Act.

Analysis: The reference was answered by applying the settled view that the appellate authority, while acting under section 38(5), does not acquire original jurisdiction to initiate and impose a penalty for the first time. Since the penalty under section 17(3) had been imposed at the appellate stage for the first time, the earlier order of the Board disallowing such action was held to be in accordance with the governing legal position.

Conclusion: The appellate authority could not impose penalty for the first time under section 17(3) of the Act while exercising powers under section 38(5), and the answer was against the Department.

Ratio Decidendi: An appellate authority exercising statutory appellate powers cannot for the first time impose a penalty unless the statute expressly confers such original penal jurisdiction.

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