Tax concession conditions must be strictly fulfilled; additional compounding fee was not a penalty under the U.P. Sales Tax Act.

A tax concession must be strictly complied with on its own terms, and the dealer could not retain the exemption benefit without satisfying the attached conditions. The additional amount demanded for availing or regularising the concession was treated as a compounding fee, not as a penalty under section 15-A of the U.P. Sales Tax Act, so the procedural safeguards for penalties did not apply. Because the dealer failed to fulfil the exemption conditions, the concession was lost and sales tax became payable.

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Issues: Whether the additional sum demanded from the dealer was a penalty attracting the safeguards of section 15-A of the U.P. Sales Tax Act, and whether failure to comply with the conditions attached to the exemption arrangement rendered the dealer liable to sales tax.

Analysis: The exemption fee arrangement was treated as a concession and not as a vested right. The dealer was required to comply fully with the conditions attached to the concession, including deposit of the balance amount fixed earlier. The further amount demanded under the Government's later concession was characterised as a compounding fee, giving the defaulting dealer an opportunity to regularise the default. On that view, section 15-A, which governs levy of penalty, had no application to the amount demanded for availing the concession. Since the dealer did not satisfy the conditions for retaining the exemption benefit, he lost the concession and became liable to pay sales tax.

Conclusion: The demand was not governed by section 15-A of the U.P. Sales Tax Act and no prior sanction or notice under that provision was necessary; the dealer remained liable for sales tax, and the writ petition failed.

Final Conclusion: The challenge to recovery of sales tax was rejected because the dealer did not comply with the conditions of the exemption scheme and could not insist on the concession without fulfilling the stipulated terms.

Ratio Decidendi: A statutory or administrative tax concession must be strictly complied with on its own terms, and a further amount imposed as a condition for availing or retaining that concession is not necessarily a statutory penalty attracting the procedural safeguards applicable to penalties.

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