Revisional penalty power under sales tax law extends to first-time penalty proceedings where statutory conditions are met.

Section 39(2) revisional jurisdiction can be used by the Commissioner to initiate and impose penalty under section 43(1) of the M.P. General Sales Tax Act, 1958 for the first time, even if the assessing authority did not impose any penalty in the original assessment. Section 43(1) is wide enough to apply in proceedings under the Act, including revision, where the Commissioner is satisfied that turnover was deliberately concealed or a false return was furnished. The power is subject to giving the assessee a reasonable opportunity of hearing.

---

---

Issues: Whether the Commissioner, in exercise of revisional jurisdiction under section 39(2), could initiate and impose penalty for the first time under section 43(1) of the M.P. General Sales Tax Act, 1958 even though no penalty had been imposed by the assessing authority in the original assessment.

Analysis: Section 39(2) empowers the Commissioner to examine any proceeding and pass appropriate orders where the assessment order is erroneous and prejudicial to revenue, while section 43(1) confers an additional power on the Commissioner or appellate authority to impose penalty in the course of any proceeding under the Act if satisfied that turnover was deliberately concealed or a false return furnished. The earlier view that revisional power could not extend to a first-time penalty under section 43(1) did not notice the statutory width of section 43(1). The later view, supported by the Supreme Court, recognized that the words "in the course of any proceeding under the Act" are wide enough to include proceedings under section 39(2), and that imposition of penalty under section 43(1) is not barred merely because the assessing authority did not act under that provision initially.

Conclusion: The Commissioner has jurisdiction to initiate penalty proceedings and impose penalty for the first time under section 43(1) while acting under section 39(2), after giving a reasonable opportunity of hearing.

---