Penalty proceedings cannot stand independently when the assessment is still under revision and may alter the penalty basis.

Where a penalty under the Commercial Tax Act depends on an assessment that is still under revision, independent penalty proceedings should not be continued because the assessment has not attained finality and any success in revision could undermine the basis of the penalty. To avoid inconsistent findings between assessment and penalty matters, the assessment and penalty revisions should be heard together and decided by the same revisional authority through separate orders. On that reasoning, the revisional order in the penalty matter was quashed, the penalty revision was revived, and the consequential attachment order was also quashed.

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Issues: Whether penalty proceedings under the Commercial Tax Act could be sustained while the revision against the assessment order was still pending, and whether the consequential attachment order could stand.

Analysis: The assessment order had not attained finality because the revision against it remained pending. If the revision succeeded, the very foundation of the penalty would disappear. In these circumstances, independent continuation of penalty proceedings could lead to conflicting findings in the assessment and penalty matters. To avoid such inconsistency, the proper course was to have the assessment and penalty revisions heard together and decided by the same revisional authority through separate orders.

Conclusion: The revisional order in the penalty matter was quashed, the penalty revision was revived, and the attachment order was also quashed. The revision proceedings were directed to be heard together with the pending assessment revision.

Ratio Decidendi: Where the validity of a penalty depends on an assessment that is still under revision, the matters should be decided together to prevent conflicting conclusions, and consequential recovery action cannot survive independently.

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