Penalty under sales tax law requires actual contravention in individual transactions, not merely excess aggregate collections.

Penalty under section 18-A of the Mysore Sales Tax Act, 1957 was held to require a substantive contravention of section 18 in the collection of tax on individual transactions. The court ruled that a mere excess of aggregate tax collections over the tax ultimately assessed on total turnover does not, by itself, establish a breach, because transaction-wise collections may lawfully differ from the final assessment. On that interpretation, the impugned penalty orders were unsustainable, the writ petitions succeeded, and the matter was remitted for fresh consideration after hearing the dealers.

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Issues: Whether penalty under section 18-A of the Mysore Sales Tax Act, 1957 could be levied merely because the aggregate tax collected during the accounting period exceeded the tax assessed on the total turnover, when there was no contravention of section 18(1) on individual transactions.

Analysis: Section 18 permits a registered dealer to collect tax only at the rate or rates specified for each transaction of sale or purchase. The penalty provision in section 18-A is attracted only when there is a real contravention of section 18, namely, collection otherwise than in accordance with the prescribed conditions and restrictions or at a rate in excess of that specified. The mere fact that the total amount collected over the year exceeds the tax ultimately assessed on the dealer's total turnover does not by itself establish a breach, because collections made transaction-wise may lawfully differ from the final assessment on aggregate turnover.

Conclusion: Penalty could not be imposed solely on the basis of excess aggregate collections where section 18(1) had not been contravened on the individual transactions; the impugned penalty orders were unsustainable.

Final Conclusion: The writ petitions succeeded, the penalty orders were quashed, and the matter was sent back for fresh consideration after hearing the petitioners in light of the court's interpretation of sections 18 and 18-A.

Ratio Decidendi: Section 18-A can be invoked only upon a substantive contravention of section 18 in the collection of tax on individual transactions, and not merely because the aggregate amount collected during the accounting period exceeds the tax assessed on the total turnover.

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