Sales tax penalty for suppressed turnover requires deliberate, contumacious or dishonest default, not automatic liability.

Penalty under the Andhra Pradesh General Sales Tax Act for non-disclosure of turnover is not automatic; it is quasi-criminal and requires proof that the dealer acted deliberately, contumaciously, dishonestly, or in conscious disregard of statutory duty. The provision must be read with the return-filing and assessment scheme, and a mere suppressed turnover or failure to establish exemption is insufficient without findings negating bona fide conduct. On that reasoning, the penalty could not be sustained and the levy was set aside in favour of the assessee.

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Issues: Whether penalty under section 14(2) of the Andhra Pradesh General Sales Tax Act could be sustained merely because turnover was not disclosed, or whether it required proof of deliberate defiance of law, contumacious or dishonest conduct, or conscious disregard of statutory obligation.

Analysis: Penalty provisions under the sales tax law were treated as quasi-criminal in character and were held not to follow automatically from the mere fact of suppressed turnover or liability to tax. Section 14(2) had to be read with section 14(8), section 13 and the scheme of return filing and assessment, but the decisive consideration remained whether the dealer's default was deliberate, contumacious, dishonest, or in conscious disregard of its obligation. The absence of consequential enquiry and the failure to record findings negativing bona fide conduct meant that the levy could not rest only on the fact of suppression or on the failure to prove exemption as a second dealer.

Conclusion: The penalty was not justified and its levy was set aside in favour of the assessee.

Ratio Decidendi: Penalty for non-disclosure of turnover under the sales tax law is not automatic and can be sustained only where the dealer's default is shown to be deliberate, contumacious, dishonest, or in conscious disregard of statutory duty.

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