ORDER Shri Anand Soni, learned counsel for the petitioner. Shri A. S. Kutumble, learned Additional Advocate-General with Smt Anjali Jamkhedkar, learned penal lawyer for the respondent - State. Though the matter is listed on the question of admission, but with the consent of the parties and as the reply has been received, the matter is finally heard. The petitioner, who is dealing in certain electrical goods and in the pumping sets had filed his sales tax return showing that on the starters and switches only three per cent tax was payable. He accordingly, deposited the said tax. When the matter came before the assessing officer, he held that the tax was payable at the rate of 12 per cent and not at the rate of three per cent. He accordingly, held the return to be a false return, directed recovery of the tax at the rate of 12 per cent and also imposed penalty. The orders were challenged up to Commercial Tax Appellate Board, Bhopal. The Board agreed with the submissions made by the present petitioner and held that the order passed by the assessing officer was bad. It further held that the tax was payable at the rate of three per cent only. The petitioner thereafter made an application under section 71 of the M.P. Commercial Tax Act, 1994 with a submission that the question relating to penalty had not been decided though was raised, therefore, the same be also decided. The said application came to be dismissed on June 28, 2008 in Rectification Case No. 8/CTAB/08 (for the period between April 1, 1988 to March 31, 1989). The Board held that the question was not raised before them. Therefore, the application under section 71 was not maintainable. The Board accordingly, rejected the application. The learned counsel for the petitioner in support of the petition had submitted that the Board had observed that the tax was payable at the rate of three per cent only, then the penalty imposed on the ground that the tax return was wrong would fall to ground. It is submitted by him that tax return was held to be false, bad or wrong by the assessing officer, because he was of the opinion that the tax was payable at the rate of 12 per cent. It is submitted by him that tax return was held to be false, bad or wrong by the assessing officer, because he was of the opinion that the tax was payable at the rate of 12 per cent. The learned counsel for the State on the other hand submitted that on grant of application under section 71 is based on justifiable grounds. We have heard the parties and have perused the record. From the assessment order dated December 7, 1991 it would clearly appear that the assessing officer was of the opinion that the sales tax return was bad as the tax was paid at the rate of three per cent only, while in fact the starter would attract the rate of 12 per cent. After holding so, the assessing officer imposed the penalty. Once the tax rate is held to be three per cent and it is further held that imposition of the tax at the rate of 12 per cent is bad, then the return filed by the present petitioner cannot be held to be false, wrong or bad. Once the return is held to be properly filed and that the tax was paid in accordance with law, then the assessing officer could not assume jurisdiction to impose the penalty. In the present matter in view of the findings recorded by the Appellate Board, we have no hesitation in holding that penalty should also stand nullified. We, accordingly, quash the order pertaining to penalty. The petition is allowed. No costs.