MANILAL MONAJI SOMAYYA Vs. COMMERCIAL TAX OFFICER GOKAK

JUDGEMENT

(1.) The petitioner was an assessee to tax under the Mysore Sales Tax Act, 1957 for the assessment year 1970-71. His tax liability was assessed at Rs.2010 for the year ending 19-10-1971. The assessing authority found that the assessee had not paid the advance tax as provided under sub- sec. 0) of S.12B of the Act. Therefore, by the impugned order dt.20-7-1972, he levied the maximum penalty provided under sub-sec. (2) of Section 12B of the Act at one-and-a- half-times the tax assessed. The said order has been challenged in this writ petition on the ground that the Commercial Tax Officer has not given any reasons for imposition of the maximum penalty.

(2.) The Act provides for imposition of penalty for failure to pay every month the advance tax on the dealer's taxable turnover during the proceeding month. But the liability to pay penalty does not arise merely upon, proof of default in payment of tax in advance every month. As observed by the Supreme Court in Hindustan Steel Ltd. v. State of Orissa, (1970) 25 STC. 211 at p.214 an order imposing penalty for failure to carry out a statutory obligation is the result of quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. 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.

(3.) The above observation of the Supreme Court equally applies to cases of imposition of penalty under sub-sec. (2) of S.12B of the Act. Therefore, the impugned order cannot be supported and accordingly, we allow this writ petition and quash the order of penalty (Ext.D) dt.20-7-1972, reserving liberty to respondent 1 to proceed in accordance with law and in the light ot the above observations. It is ordered accordingly. No Costs.