Judgment :- V. RAMASWAMI, J. In T.C. (R) No. 452 of 1970 the question relates to the jurisdiction of the AO to impose penalty under S. 16(2) of the Tamil Nadu General ST Act, 1959, by a separate and independent order. The facts leading to this petition may now be noted. The respondents-assessee are dealers in timber. For the asst. yr. 1959-60 they were assessed on a taxable turnover of Rs. 3, 86, 284.27 as against Rs. 3, 20, 554.36 reported by them. On a surprise inspection of their place of business on 4th August, 1964 certain records were seized and on verification of these records, the AO considered that the assessees had suppressed taxable turnover to the extent of Rs. 1, 20, 346.92. Proceedings accordingly were initiated under S. 16(1). After giving a reasonable opportunity to the assessees by a revised assessment order dt. 18th December, 1964 the suppressed turnover of Rs. 1, 20, 346.92 was brought to assessment. In this assessment order the AO has stated that separate orders will be issued with regard to levy of penalty. Thereafter, on 27th March, 1965 a notice was issued under S. 16(2) proposing to levy a penalty of Rs. 5, 714 on the ground that there was a wilful suppression of taxable turnover to the extent of Rs. 1, 20, 346.92. The penalty was calculated at 1 1/2 times the tax due on the suppressed turnover. 2. The assessees filed their objection in which they contended that the additions were made on estimates without accepting the explanations offered by them and that there was no suppression of the turnover at all. After considering these objections by an order dt. 31st March, 1965, confirming the proposal the AO levied a penalty of Rs. 5, 714 under S. 16(2). The assessees preferred an appeal against this order levying the penalty to the AAC who, by an order dt. 31st October, 1966 confirmed the finding of wilful suppression, dismissed the appeal. 3. On a further appeal, the Tribunal held that S. 16(2) does not contemplate an independent order of penalty and that, therefore, the impugned order of penalty was without jurisdiction. In support of this view the Tribunal relied on the decision of this Court in the State of Madras vs. Ramulu Naidu. 3. On a further appeal, the Tribunal held that S. 16(2) does not contemplate an independent order of penalty and that, therefore, the impugned order of penalty was without jurisdiction. In support of this view the Tribunal relied on the decision of this Court in the State of Madras vs. Ramulu Naidu. In this revision petition the learned Government Pleader contended that under S. 16(2) an AO could made either a consolidated order of reassessment and levy of penalty and if it is necessary he could also make a separate order of penalty after making an assessment order under S. 16(1). He further contended that the decision in the State of Madras vs. Ramulu Naidu (supra) was rendered with reference to the provision in S. 12(3), which is not similar to the power of AO under S. 16(2) and that, therefore, that decision is not applicable. 4. In the decision reported in the State of Madras vs. Ramulu Naidu (supra) this Court on a consideration of the provisions of S. 12, held that the penalty contemplated under S. 12(3) depends on and follows a finding as to the incompleteness and incorrectness of the return submitted, and form part of the proceedings resulting in best judgment assessment. No independent enquiry was contemplated by that provision for the purpose of levy of penalty and that, therefore, the order of penalty should also form part and parcel of the assessment order itself. 5. The learned Government Pleader argued that there are two material differences in the penalty proceedings contemplated under ss. 12(3) and 16(2). Firstly, no separate notice proposing a levy of penalty is provided for under S. 12(3), while S. 16(2) requires that such a notice will have to be issued to the dealer giving a reasonable opportunity of showing cause against such imposition. Secondly, while S. 16(2) contemplates a specific finding of wilful non-disclosure by the dealer of assessable turnover by reason of which the turnover had escaped assessment, S. 12(3) automatically invests a power on the AO with jurisdiction to levy penalty when an assessment is made under sub-s. (2) of that section. It is true that there is no specific requirement in S. 12(3) that a notice shall be issued to the dealer before a penalty is levied and an express provision is made requiring such notice to be given under S. 16(2). It is true that there is no specific requirement in S. 12(3) that a notice shall be issued to the dealer before a penalty is levied and an express provision is made requiring such notice to be given under S. 16(2). But, we do not think that an AO would be entitled to make an order of penalty under S. 12(3) without such a notice to the dealer, though in terms S. 12(3) had not required such notice to be given, that provision being penal in nature. In our opinion, the principles of natural justice would require a notice being given to the dealer before the levy of penalty. Further, the levy of penalty under S. 12(3) is discretionary both with respect to levy and also the quantum of penalty. If that is so, certainly the dealer should be given notice to show cause as to why an order of penalty should not be made under S. 12(3). Might be, if the AO is satisfied with the explanation either he may omit to levy the penalty or impose such reasonable penalty, as he considers just and necessary in the circumstances of the case. Having regard to these facts, we are of the view that the provision of S. 12(3) definitely contemplates a notice being issued to the dealer before an order of penalty is made under that provision. But that is not to say that the notice should be either separate or at any particular time. The notice to show cause against levy may form part of the pre-assessment notice or could be issued separately also. Therefore, there is no distinction between S. 16(2) and 12(3) on this question of notice. 6. We are also unable to agree with the learned counsel that the fact that a specific finding is required under S. 16(2) as to the wilful nature of the non-disclosure makes any distinction. The scheme of s. 16 shows that a re-assessment could be made for any reason where whole or any part of the turnover of business of a dealer has escaped assessment to tax. But if the penalty is to be levied on the ground of escarpment of the turnover, a finding is necessary as to the wilful nature of the non-disclosure. But if the penalty is to be levied on the ground of escarpment of the turnover, a finding is necessary as to the wilful nature of the non-disclosure. Though S. 12(3) does not contemplate a finding being given as to the wilful filing of the incomplete and incorrect return or not submitting a return, it is always open to the dealer to satisfy the assessing authority that he is not filing the return in time or filing of the return incompletely and incorrectly was bona fide and therefore, the assessing officer should not impose any penalty or should impose only such penalty as may be considered reasonable. It is true as contended by the learned counsel for the Revenue, that when once the AO makes an assessment to the best of his judgment under S. 12(3), he is entitled to levy the penalty, even if the best of his judgment under S. 12(3), he is entitled to levy the penalty, even if he finds that the dealer was not blame-worthy. But the levy of penalty being discretionary before he levies the penalty, he will have to reject the explanation of the dealer, in which case, undoubtedly he will have the power to levy the penalty on any figure he chooses. Even in case where he accepts the explanation, still he may choose to levy the penalty, but the quantum of penalty will have to depend on the facts and the circumstances of each case, of course subject to the maximum prescribed under that Section. But, on the other hand, in cases falling under Section 16(2) unless there is a definite finding to the wilful non-disclosure of taxable turnover, the AO will have no jurisdiction to issue the penalty. Except for this difference, we do not find any other difference between S. 12(3) as it stood at the relevant period and S. 16(2). As we have already seen, this Court in the State of Madras vs. Ramulu Naidu (supra) held that the levy of penalty should form part of the assessment order itself. Thus no separate order is also contemplated under S. 16(2). As we have already seen, this Court in the State of Madras vs. Ramulu Naidu (supra) held that the levy of penalty should form part of the assessment order itself. Thus no separate order is also contemplated under S. 16(2). Thiru S.V. Subramaniam, whom we required to argue the case in the absence of the respondent brought to our notice S. 31 relating to the appeal to the AAC where, while S. 12 is referred to without any reference to sub-sections in that section, sub-s. (i) and (2) of S. 16 is specifically referred to. It was so mentioned because two separate orders were contemplated under S. 16(1) and (2). On the other hand only a consolidated order was expected to be made in S. 12 and therefore s. 12 is referred to without any reference to sub-sections therein. We are unable to accept this argument of the learned counsel also. Sec. 16 has two more sub-sections (sub-ss. 3 and 4), which do not contemplate making of any orders under that provision; whereas in s. 12 each one of the sub-sections deals with orders and instead of mentioning each one of the sub-sections, the totality of that section is mentioned in the appeal provision. Further, S. 12 contemplates two different types of orders, one accepting the return under S. 12(1) and another a best judgment assessment under S. 12(2). But S. 31 did not make any specific reference because everyone of the orders made under S. 12 is appealable. We are, therefore, unable to hold that separate orders were contemplated under S. 16(2). In fact, it was not even the case of the Government Pleader that only separately orders could be made under S. 16(2). On the other hand, he contended that it was open to the AO either to make a consolidated order or separate orders under S. 16(2). We are, therefore, of the opinion that the Tribunal was right in holding that no separate order of penalty could be made under S. 16(2). 7. Before we part with this case, we must express our grateful thanks to Thiru S.V. Subramaniam for the assistance rendered in the absence of the respondent in this case. 8. For the foregoing reasons, the tax revision petition is dismissed. But there will be no order as to costs. 7. Before we part with this case, we must express our grateful thanks to Thiru S.V. Subramaniam for the assistance rendered in the absence of the respondent in this case. 8. For the foregoing reasons, the tax revision petition is dismissed. But there will be no order as to costs. T.C. (R) 453 of 1970 : The point involved in this case is covered by our decision in T.C. (R) 452 of 1970. For the reasons contained therein, this tax revision petition is dismissed. But there will be no order as to costs.