Automatic statutory penalty for delayed tax payment upheld where the statute leaves no discretion or mens rea requirement.

Section 23(3) of the Kerala General Sales Tax Act was treated as creating an automatic statutory liability on delayed payment of assessed tax, with no discretion left to the assessing authority. The provision was construed as operating on default according to the statute's own terms, and Rule 31 was limited to the mode of remittance and demand notice. On that basis, prior hearing was held unnecessary, natural justice principles were inapplicable, and mens rea was excluded by the legislative wording. The Article 14 challenge also failed because the differential consequence flowed from the assessee's own choice of payment mode and subsequent default.

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Issues: Whether penalty under section 23(3) of the Kerala General Sales Tax Act, 1963, could be imposed automatically on delayed payment without discretion, notice, or proof of contumacious conduct, and whether such levy was invalid for want of natural justice, mens rea, or discrimination under Article 14 of the Constitution of India.

Analysis: Section 23(3) made liability to pay penalty arise on failure to pay the assessed tax within the time specified, at the rates prescribed by the statute itself. The provision left no discretion with the assessing authority, and Rule 31 only provided the mode of remittance and issuance of demand notice. On that construction, the levy operated as an absolute statutory consequence of default and was treated as being in the nature of interest by way of damages rather than a discretionary penal order. Since the statute itself fixed the consequence of default, the principles of natural justice were held inapplicable, and no prior hearing was required. The argument based on mens rea also failed because the legislative language excluded any requirement of guilty mind. The Article 14 contention was rejected because the choice of mode of payment was voluntary and the differential consequence arose from the assessee's own election and default.

Conclusion: The penalty under section 23(3) was held to be valid and enforceable as an automatic statutory liability on default, without any requirement of discretion, prior hearing, or mens rea, and the challenge to the notices failed.

Ratio Decidendi: Where a taxing statute expressly creates an automatic monetary consequence for delayed payment and vests no discretion in the authority, the levy is enforceable according to its terms and cannot be invalidated on the ground of natural justice or absence of mens rea.

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