Revisional power cannot start penalty proceedings for the first time when the assessing authority never initiated them.

Revisional power under section 40 of the Haryana General Sales Tax Act could not be used to direct first-time initiation of penalty proceedings under section 10(7) of the Punjab General Sales Tax Act where the Assessing Authority had never initiated such proceedings. Assessment and penalty were treated as distinct and independent, and revision was limited to examining the legality or propriety of proceedings already made. In the absence of any existing penalty order or initiated penalty proceeding, the revisional authority lacked jurisdiction to set penalty proceedings in motion or remand the matter for imposition of penalty. The issue was answered in favour of the assessee.

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Issues: Whether the revisional authority, in exercise of suo motu revision under section 40 of the Haryana General Sales Tax Act, 1973, could direct initiation of penalty proceedings under section 10(7) of the Punjab General Sales Tax Act, 1948, when the Assessing Authority had not itself initiated such penalty proceedings.

Analysis: Section 40 empowered the revisional authority to call for the record to examine the legality or propriety of proceedings or orders made therein. The penalty question arose from assessment proceedings, but the assessment and penalty proceedings were treated as distinct and independent. Since the Assessing Authority had not invoked section 10(7) and had not initiated penalty proceedings, there was no penalty order or omission within an initiated penalty proceeding for the revisional authority to revise. In such a situation, the revisional authority could not independently set in motion penalty proceedings or remand the matter for first-time imposition of penalty. The view was consistent with the reasoning adopted in comparable sales tax decisions that revision cannot be used to initiate penalty jurisdiction for the first time where the original authority never exercised it.

Conclusion: The revisional authority had no jurisdiction to direct initiation of penalty proceedings under section 10(7) when the Assessing Authority had not initiated penalty proceedings. The question was answered in the negative, in favour of the assessee and against the Revenue.

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