Discretionary penalty for sales tax default may consider prior and subsequent conduct when assessing wilful breach.

Enhanced penalty for failure to file quarterly sales tax returns and pay tax on time was upheld because the default was admitted and the authority found, on objective material, that the breach was deliberate and wilful. In fixing discretionary penalty up to the statutory maximum, the authority could consider all relevant surrounding circumstances, including the assessee's prior and subsequent conduct, to assess whether the default was venial or intentional. The allegation of extraneous political motive was rejected because the order rested on independent factual reasons, and concurrent findings in revision did not disclose any question of law.

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Issues: Whether the enhancement of penalty for failure to file quarterly sales tax returns and pay tax in time was vitiated by extraneous considerations, and whether the authority could take into account the assessee's prior and subsequent conduct while determining the quantum of penalty.

Analysis: The default in filing returns and paying tax within the prescribed time was admitted. The record showed that the assessee had earlier filed some quarterly returns and therefore knew the statutory requirement. The Excise and Taxation Commissioner found, on objective material, that the defaults were deliberate, wilful, and in disregard of statutory obligations. Penalty under the Act was discretionary and could extend up to the statutory maximum, so the authority was entitled to determine quantum on the basis of all relevant circumstances. In deciding whether the breach was venial or deliberate, the authority could legitimately look at the assessee's conduct in earlier and later years. The alleged political motive arising from the Das Commission report was not borne out, because the enhancement was supported by independent factual reasons recorded in the order. Since the findings were based on objective material and were concurrently upheld in revision, no question of law arose for reference.

Conclusion: The enhancement of penalty was valid, and the challenge on the ground of extraneous considerations failed.

Ratio Decidendi: In proceedings for statutory penalty, the authority may assess the quantum with reference to all relevant surrounding circumstances, including prior and subsequent conduct, and concurrent findings based on objective material do not give rise to a question of law merely because the assessee alleges an improper motive.

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