JUDGMENT : ( 1. ) THIS order shall also dispose of Misc. Civil Case no. 397/73 and 398/73. These are three references made by the Sales Tax tribunal referring for our answer the following questions of law : (1) Whether in the facts and circumstances of the case the Tribunal was justified in quashing the penalty under section 43 (1) on the ground that the assessee seems to have omitted sales tax recovered from the taxable turnover due to a bona fide mistake ? (2) Whether the Tribunal was right in its conclusion that when the assessing authority has not found the books of accounts to be otherwise unreliable best judgment assessment cannot be resorted to (a) on the ground that day to day manufacturing account has not been required to be maintained under the provisions of the Act or statutory rules or by virtue of a lawful direction given by the Commissioner of Sales Tax, or (b) on the ground that the loss in manufacture is too much, unless it is put to the assessee as to what the normal loss is and the assessee is called upon to explain why his loss was more. (3) Whether the Tribunal was right in directing the assessing authority to waive the penalty under section 8 (2) if the following facts are verified namely- (a) for the year 1964-65 if the dealer has paid advance tax at 1% on Rs. 41,000. (The assessing authority estimated that out of oil-seeds purchased on form XII-A oil-seeds worth Rs. 35,000 may be considered to have been utilised in the manufacture of a product sold outside the State. 1% tax was already paid on this amount. The assessing authority imposed a penalty of Rs. 600/- under section 8 (2) which was maintained by the first appellate authority.) (b) For the year 1965-66 if the sales tax authorities have assessed full Sales-tax on the amount of Rs. 19,123/- in the hands of the purchaser from the assessee in addition to the purchase tax at 1% in the hands of the assessee. This amount represents the price of oil-seeds which were purchased on form XII-A but sold by the assessee to another dealer for re-sale getting from him form XII. (c) For the year 1966-67 if the dealer has paid advance tax on rs. 51,408 as against Rs. This amount represents the price of oil-seeds which were purchased on form XII-A but sold by the assessee to another dealer for re-sale getting from him form XII. (c) For the year 1966-67 if the dealer has paid advance tax on rs. 51,408 as against Rs. 40,000 estimated as the amount of raw material purchased on form XII-A corresponding to outside sale of the manufacturing product. ( 2. ) THE relevant assessment years are Diwali 1964-65, 1965-66 and 1966-67. Question No. 1 relates to the assessment year 1964-65. In the return filed by the assessee, the assessee claimed that sales tax paid by the purchasers did not form part of the turnover. There was no concealment of the turnover and all that can be said is that the assessee wrongly raised a plea that the turnover should not include the sales tax realised by the assessee from the purchasers. It cannot be said that in these circumstances the assessee was liable to penalty under section 43 (1) of the M. P. General sales Tax Act, 1958. Even though the plea was untenable, it cannot be said that the assessee was guilty of filing a false return under section 43 (1 ). The point is covered by a Division Bench decision of this Court in Dadabhoys new Chirimiri Ponri Hill Colliery Compay Private Ltd. v. Commissioner of Sales Tax, M. P. 1979 MPLJ 56 . , Question No. 1 must, therefore, be answered in the affirmative in favour of the assessee and against the department. ( 3. ) QUESTION No. 2 relates to the year 1964-65. The Tribunal held that the account books of the assessee were not unreliable. The Tribunal was of opinion that when the books of account were not unreliable, no case was made out for enhancement of the turnover and that the turnover should be taken as per the books of account. The finding that the books of account of the assessee were reliable is a pure finding of fact. It is not vitiated by the consideration that the assessee did not maintain day to day manufacturing account or that the loss in manufacturing was too much. The finding that the books of account of the assessee were reliable is a pure finding of fact. It is not vitiated by the consideration that the assessee did not maintain day to day manufacturing account or that the loss in manufacturing was too much. It may be that if a loss shown by an assessee is unusual, the assessing authority may infer that the books are not reliable but when the books are held to be reliable they cannot be rejected simply on the ground that the loss shown is too much. On the finding that the books of account were reliable, the Tribunal in our opinion was right in accepting the turnover as disclosed in the books of account and in setting aside the enhancement in the turnover made by the Sales Tax Officer. In this connection we may point out that it was held by a Division Bench of this court in The Commissioner of Sales Tax v. Messrs Ramchandra Badri Prasad, MC CNo786/7i, decided on 3rd August 1971. , that an assessee is not bound to maintain manufacturing account of the lime manufactured, sold and left over as closing stock. The principle of this case may be applied here in holding that the account books of the assessee could not be rejected simply on the ground that he had not maintained day to day manufacturing account. However, as earlier stated, when the finding is clearly that the books of account were reliable, the turnover mentioned in them has to be accepted for the purpose of assessment. Question No. 2 will have, therefore, to be answered in the affirmative in favour of the assessee and against the department. ( 4. ) THE point involved in question Nos. 3 (a) and 3 (c) is the same. The assessee in the assessment years 1964-65 and 1966-67 purchased oil-seeds on declarations in form XII-A. The declaration was to the effect that the assessee purchased the goods for purposes of manufacture of other goods for sale in the State of Madhya Pradesh or in the course of inter-State trade or commerce. The assessee paid only 1% tax on these purchases to the sellers. The goods manufactured by the assessee were oil and oil-cakes. Oil-cakes of the value of Rs. 35,000 were sold outside the State in 1964-65. Similarly, oil-cakes of the value of Rs. The assessee paid only 1% tax on these purchases to the sellers. The goods manufactured by the assessee were oil and oil-cakes. Oil-cakes of the value of Rs. 35,000 were sold outside the State in 1964-65. Similarly, oil-cakes of the value of Rs. 40,000 were sold outside the State in the assessment year 1966 67. There was thus contravention of the declarations given by the assessee in that all the goods manufactured out of the purchases made under declarations in form XII-A were not utilised for manufacture of goods for sale within the State or in the course of inter-State trade or commerce. At the time when the returns were filed, the assessee deposited 1 % tax on the estimated quantity of oil-seeds which was utilised for the manufacture of goods which were sold outside the State. The Tribunal came to the conclusion that as the minimum penalty leviable under section 8 (2) was 1% being the difference between the amount of tax on the sale of oil-seeds at full rate and the amount of tax payable under section 8 (1), having regard to all the circumstances of the case the assessee was not liable for any further penalty. The Tribunal remanded the case to the assessing authority to find out whether the tax or penalty had been deposited in the manner stated by the assessee. It may here be mentioned that the full rate of tax on sale or purchase of oil-seeds at the relevant time was 2% and the concessional rate of tax under section 8 (1) at the relevant time was 1%. Although the assessee paid 1% at the time of filing the returns showing it as balance of tax but the real nature of such a deposit was an advance minimum penalty to which the assessee could be made liable under section 8 (2 ). In Hindustan steel Ltd. v. State of Orissa (1972) 83 ITR 26. the Supreme Court observed that even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to imposing penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the Statute. The Supreme Court further observed that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. The principles laid down by the Supreme Court in the case of Hindustan Steel Ltd. have been applied to section 8 (2) of the m. P. General Sales Tax Act by a Division Bench of this Court in M/s Jaswantlal Prahlad Bhai and Co. v. Commissioner of Sales Tax, M. P. , 1973 MPLJ 331 . Even otherwise it is clear that the question whether in a particular case minimum penalty should alone be imposed or higher penalty should be imposed is a matter of judicial discretion to be exercised having regard to the facts and circumstances of each case. As earlier pointed out, the tribunal has noted the assessees conduct in depositing the amounts equivalent to the minimum penalty leviable under section 8 (2) at the time of filing the returns. It has further noticed that value of oil-cakes sold outside the State was comparatively small having regard to the total turnover of the assessee. It has also noticed that at the stage when the assessee makes purchases of raw materials for manufacture of goods for sale within the State or in the course of inter-State trade or commerce, it may not be possible for him to estimate exactly as to what quantity of raw material would be needed for this purpose. Having regard to all these circumstances, the Tribunal was of opinion that if the assessee had deposited the amounts as stated by him at the time of filing the returns which amounts to some extent exceeded the amounts leviable as minimum penalty under section 8 (2), this was not a fit case for further imposition of penalty. In our opinion, the discretion so exercised by the Tribunal is well within the limits of the law and cannot be said to be arbitrary Questions Nos. 3 (a) and 3 (c) will, therefore, have to be answered in favour of the assessee and against the department. ( 5. In our opinion, the discretion so exercised by the Tribunal is well within the limits of the law and cannot be said to be arbitrary Questions Nos. 3 (a) and 3 (c) will, therefore, have to be answered in favour of the assessee and against the department. ( 5. ) COMING to question No. 3 (b), the relevant facts are that the assessee in the normal course in the year 1965-66 purchased oil-seeds under form XII-A and paid 1% tax to the sellers. Out of the quantity of oil-seeds purchased, the assessee resold oil-seeds of the value of Rs. 19,123 within the state to another dealer under form XII, i. e. for re-sale. Oil-seeds are declared goods under the Central Sales Tax Act, 1956. Under section 15 (a)of the Central Act the tax payable on declared goods is a single point tax. The declared goods are specified in Part I of Schedule II to the State Act. The definition of "taxable turnover" contained in section 2 (r) of the State act does not include sales to a registered dealer of goods specified in Part I of Schedule II and declared by him in the prescribed form as being intended for resale by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce. In view of this definition of "turnover" sales tax on declared goods is payable at the last point sale, i e. , when the goods are sold to a consumer or manufacturer. The manufacturers of oil may purchase oil-seeds in form XII-A under section 8 (1 ). If they do so, they are liable to pay tax at the rate of 1 % to the seller. They can also purchase oil-seeds on form XII. In that case they would not be liable to pay any sales tax to the seller. They would not be liable to the payment of tax to the Government if they resell the goods to another dealer in form XII. But in case they utilise the oil-seeds purchased in form XII for manufacture, they are liable to pay tax at the rate of 1% under notification No. 2708/cr-85-V-SR, dated 18th December 1959. They would not be liable to the payment of tax to the Government if they resell the goods to another dealer in form XII. But in case they utilise the oil-seeds purchased in form XII for manufacture, they are liable to pay tax at the rate of 1% under notification No. 2708/cr-85-V-SR, dated 18th December 1959. In this back ground the Tribunal was of opinion that the act of the assessee in selling oil-seeds under form XII was only a trivial or venial breach and the assessee should not be made liable for penalty under section 8 (2 ). The Tribunal observed that if the assessee had purchased the goods under form XII, he would not have been liable to pay any tax. The assessee, however, purchased the goods in form XII-A and paid 1% tax to the seller which he could have avoided by purchasing them in form XII. The purchases made by the assessee in form XII-A were bona fide acts on his part and the intention was not to deprive the State of any tax which could have been lawfully recovered. Rather the State was benefitted as the assessee paid 1% tax to the seller at the time of purchase which he could have avoided by making purchases in form XU. The reasons given by the tribunal cannot be said to be extraneous in the light of the principles laid down by the Supreme Court in the case of Hindus than Steel Ltd. which were applied by this Court in the context of section 8 (2) in M/s Jaswantlals case (supra ). We are of opinion that it cannot be said that the discretion exercised was in any way erroneous. Question No. 3 (b) must also be answered in favour of the assessee and against the department. ( 6. ) FOR the reasons given above, all the questions referred are answered in favour of the assessee and against the department. There shall be no order as to costs. Questions answered in favour of assessee.