Reasoned penalty orders required; unexplained maximum penalty under sales tax law was quashed.

A penalty order under section 12B of the Karnataka Sales Tax Act was held unsustainable because it imposed the maximum penalty without recording reasons. An adjudicatory order carrying civil consequences must disclose the basis of the decision so that it is open to judicial scrutiny. Here, the assessing officer merely confirmed the proposed levy without any reasoning, so the order was not a speaking order. The penalty order was therefore quashed.

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Issues: Whether the penalty order passed under section 12B of the Karnataka Sales Tax Act, 1957 was liable to be quashed for want of reasons.

Analysis: The impugned order did not disclose any reason for imposing the maximum penalty permissible in law. An adjudicatory order affecting civil consequences must record reasons so that the basis of the decision is evident and susceptible to judicial scrutiny. Since the assessing officer merely confirmed the proposed levy without giving any reasoning, the order was not a speaking order.

Conclusion: The penalty order was quashed and the petitioner succeeded.

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