JUDGMENT K. P. RADHAKRISHNA MENON, J. - The assessee is the petitioner. 2. The order of the assessing authority levying penalty under section 45A(1)(d) of the Kerala General Sales Tax Act, 1963 (for short "the Act"), and confirmed by the revisional authority, is under challenge in this original petition. In the return in form No. 9 submitted by the petitioner in June, 1977, for the period from April to June, the taxable turnover of Rs. 6,89,157.41 with a tax effect of Rs. 27,566.28 had not been shown. However, this amount had been shown in the trading accounts for the above period. 3. Non-disclosure of this amount which represents the sale proceeds of the transaction with L & P Feeds Compounding Company owned by the Government, in the return submitted in the month of June is deliberate and, therefore, the penalty provision aforesaid is attracted, is the case of the department. Consequently the assessing authority levied a penalty which is double the tax, the petitioner is liable to pay. This order was under attack before the Deputy Commissioner, who by order in RP 102/80 dated November 30, 1981, set aside the order and remanded the penalty proceedings to the assessing authority for a de novo consideration. The remand order reads : "The allegation of wilful non-disclosure of turnover is not proved beyond doubt since the turnover has been shown in the accounts. The petitioner has stated that the contradiction between the turnover returned in form No. 9 and that accounted is due to delay in settling of dispute between the assessee and the L & P Feeds Compounding Company regarding the quantity, which was resolved only subsequently. The assessee has stated that they prepared bills for this sales and have accounted. They have filed a certificate from the L & P Feeds Compounding Company regarding the goods supplied to the company for the period from April 1, 1977 to June 30, 1977. In this case, maximum penalty has been levied. In the light of the facts of the case, the assessing authority should have particularly enquired into the contentions and arrived at a definite finding as to whether maximum penalty was warranted in this case. This is required as per the dictum laid down in TRC 61 of 1974 in Choyikutty's case KB Bulletin 11/74. In the light of the facts of the case, the assessing authority should have particularly enquired into the contentions and arrived at a definite finding as to whether maximum penalty was warranted in this case. This is required as per the dictum laid down in TRC 61 of 1974 in Choyikutty's case KB Bulletin 11/74. The assessing authority has, therefore, to re-examine this case and arrive at a definite finding in this respect." The assessing authority thereafter again considered the case of the petitioner and passed an order levying a penalty of Rs. 40,000. That order was challenged before the Deputy Commissioner by filing a revision. The Deputy Commissioner by exhibit P2 order dismissed the revision. Aggrieved by the order, the assessee filed a second revision before the Commissioner who by exhibit P4 order modified the order and reduced the penalty which is equal to the tax due. 4. The question thus arising for consideration is whether the return submitted by the petitioner in the month of June for the period from April to June can be said to be untrue or incorrect. That the taxable turnover of Rs. 6,89,157.41 relating to the period from April 1, 1977 to June 30, 1977, had not been disclosed in the statutory return in form No. 9 is beyond dispute. That the said taxable turnover, however, had been shown in the trading accounts of the petitioner, is beyond challenge. The non-disclosure of the above taxable turnover is explained by the assessee thus : This taxable turnover represents the proceeds from the sale of polythene bags, cattle feed, etc., to the L & P Feeds factory owned by the Government. "......... Though goods were delivered during June, 1977, the cost was fixed by the L & P Feeds factory and payment made in the subsequent months and hence the sales could be accounted only after June after fixation of prices. While submitting the return in June, 1977, the prices were not fixed and hence not included in the return .......... The petitioner has accounted these sales as soon as the prices were fixed by the purchasers and the turnover has been included in the annual return in form No. 8 filed in May, 1978, voluntarily. While submitting the return in June, 1977, the prices were not fixed and hence not included in the return .......... The petitioner has accounted these sales as soon as the prices were fixed by the purchasers and the turnover has been included in the annual return in form No. 8 filed in May, 1978, voluntarily. The only irregularity on the part of the petitioner was that they did not file revised return in form No. 9 for June, 1977, including this sale which was completed and settled after June, 1977." 5. The learned counsel for the assessee would argue that these circumstances would indicate that the assessee has not intentionally submitted an untrue or incorrect return. That the assessee had no such intention, it is further argued, is clear from the fact that this amount had been shown in the trading accounts. Under such circumstances, the assessing authority, if as a matter of fact, the said authority was of the view that the return did not disclose the true state of affairs, could have proceeded to assess the petitioner under sub-section (2) of section 18 as it stood at the relevant time. This sub-section reads : "If no return is submitted by the dealer under sub-section (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority may determine the amount of tax payable by the dealer in accordance with the provisions of sub-section (3) of section 17." Sub-section (3) of section 17 empowers the assessing authority to make a best judgment assessment. That means, if the assessing authority was of the view that the return submitted by the assessee was incorrect or untrue, the assessing authority could have made a best judgment assessment. Such a best judgment assessment, however, is not possible in a case where the assessee had shown the details of the particular sale which was not disclosed in the return, in his trading accounts. Under such circumstances could it be said that the assessing authority is justified in levying penalty is the question before me. An assessing authority under such circumstances has no power to levy penalty in view of the decision of the Supreme Court in State of Madras v. S. G. Jayaraj Nadar & Sons [1971] 28 STC 700. Under such circumstances could it be said that the assessing authority is justified in levying penalty is the question before me. An assessing authority under such circumstances has no power to levy penalty in view of the decision of the Supreme Court in State of Madras v. S. G. Jayaraj Nadar & Sons [1971] 28 STC 700. The Supreme Court after considering the provisions under the Madras General Sales Tax Act, 1959 (which are similar to the one here) has held as follows : "Penalty can be levied under section 12(3) of the Madras General Sales Tax Act, 1959, on the ground that the dealer has submitted an incomplete or incorrect return only if the assessment had to be made to the best of his judgment by the assessing authority. Where certain items which are not included in the turnover are discovered from the dealer's own account books and the assessing authority includes these items in the dealer's turnover, the assessment cannot be regarded as based on best judgment and penalty cannot be levied in respect of such items. Where account books are accepted along with other records there can be no ground for making a best judgment assessment." (Head note) From the facts discernible from the files, it can be inferred without fear of contradiction that the assessing authority could not have made a best judgment assessment. It is relevant in this context to note that it is not the case of the assessing authority that the trading account does not disclose the true state of affairs. As a matter of fact the assessing authority as also the revisional authority have relied on the trading account to hold that the return submitted is untrue. The assessing authority ought to have accepted the explanations and dropped the proceedings under section 45A of the Act to levy the penalty. The levy under the circumstances cannot be sustained. Exhibits P2 and P4, therefore, are quashed. The penalty already recovered in the circumstances, shall be refunded to the petitioner as expeditiously as possible, in any event, within three months from the date of receipt of a copy of the judgment. The original petition is disposed of as above. Petition allowed.