Revisional power over penalty orders requires an erroneous, revenue-prejudicial decision; bona fide conduct defeated enhancement here.

Section 39(2) of the M.P. General Sales Tax Act, 1958 empowers the Commissioner to revise any order, including a penalty order, where it is erroneous and prejudicial to revenue, so the revisional power is not limited to assessment orders. However, a penalty order may be interfered with only if the assessing authority exercised discretion in a wrong or perverse manner. On the facts, the dealer had voluntarily deposited purchase tax before final assessment, sales tax had been regularly paid, and the conduct indicated bona fide ignorance of liability. The original lenient penalty order was therefore not shown to be erroneous, and revision enhancing the penalty was unjustified.

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Issues: Whether the Commissioner could revise an order enhancing penalty under section 39(2) of the M.P. General Sales Tax Act, 1958, and whether the assessing authority's order imposing penalty of Rs. 500 was erroneous and prejudicial to the revenue.

Analysis: Section 39(2) empowered the Commissioner to revise any order under the Act if it was erroneous in so far as it was prejudicial to the interests of the revenue, and the power was not confined to assessment orders alone. An order imposing penalty could also be revised if the assessing authority had exercised its discretion in a wrong or perverse manner. On the facts, however, the dealer had voluntarily deposited the purchase tax before assessment was finalised, sales tax had been regularly paid, and the circumstances indicated bona fide ignorance of liability. The assessing authority had therefore taken a lenient view on penalty, and the revisional authority did not show that the original penalty order was erroneous.

Conclusion: The revision under section 39(2) was not justified, and the enhancement of penalty was set aside in favour of the assessee.

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