Discretionary tax concession on licence breach requires first finding the breach and then weighing all relevant factors.

Where a statutory concession becomes discretionary on breach of licence conditions, the appellate authority must first determine whether the breach occurred and then exercise discretion judicially on all relevant factors. The Madras HC noted that the assessee's accounts were not true and correct and that the Tribunal had recorded contravention of licence conditions, but the Tribunal failed to examine that breach before directing concessional tax on suppressed turnover. As a relevant consideration was omitted, the Tribunal's exercise of discretion could not stand and the matter was remitted for fresh disposal in accordance with law.

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Issues: Whether contravention of the conditions of a licence under the sales tax law attracted section 6-A so as to justify denial of the concessional rate, and whether the Tribunal had properly exercised its discretion in directing tax at the concessional rate on the suppressed turnover.

Analysis: The assessee's accounts were found not to be true and correct, and the Tribunal recorded that the conditions of the licence had been contravened. On that footing, section 6-A applied. The provision, however, was permissive and did not compel the assessing authority or the appellate forum to withdraw the concession in every case. The discretion had to be exercised judicially on relevant considerations. The Tribunal's direction proceeded on the assumption that suppression was not wilful, but it did not first examine whether the suppression itself amounted to a breach of the licence conditions. A relevant factor was therefore omitted from consideration.

Conclusion: The Tribunal's exercise of discretion could not stand, and its order was set aside with a direction that the appeal be reheard and disposed of afresh.

Final Conclusion: The matter was sent back to the Tribunal for reconsideration in accordance with law after applying the correct scope of section 6-A.

Ratio Decidendi: Where a statutory concession is made discretionary upon breach of licence conditions, the appellate authority must first determine whether such breach occurred and then exercise its discretion judicially on all relevant factors.

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