Reasonable cause defeats tax penalty where delayed payment arose from a bona fide mistaken belief about continuing permission.

Penalty for delayed tax payment is not automatic and applies only where the default is without reasonable cause. The governing test is whether the dealer acted deliberately in defiance of the law, in conscious disregard of the obligation, or with contumacious or dishonest conduct, reflecting the quasi-criminal nature of the proceedings. The department bears the initial burden to show a prima facie default without reasonable cause, after which the assessee may establish reasonable cause on a balance of probabilities. On the stated facts, a bona fide but mistaken belief that earlier permission continued was treated as reasonable cause, so penalty was not leviable.

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Issues: Whether penalty was leviable for delayed payment of tax under the penalty provision when the assessee acted under a bona fide but mistaken belief about the continued operation of the earlier permission.

Analysis: Penalty for default in payment of tax is not automatic. The governing test is whether the default occurred without reasonable cause, and the proceedings are quasi-criminal in character. The authority must consider whether the dealer acted deliberately in defiance of law, in conscious disregard of obligation, or with contumacious or dishonest conduct. The initial burden lies on the department to establish a prima facie case of default without reasonable cause, after which the assessee may show reasonable cause on a balance of probabilities. Where the factual finding is that the tax was not paid within time because of a bona fide though mistaken belief as to the continued validity of the permission, the same circumstance bears directly on the existence of reasonable cause for the penalty provision itself.

Conclusion: Penalty was not leviable because the default was attributable to reasonable cause and the assessee was entitled to succeed.

Ratio Decidendi: Penalty for failure to comply with a statutory tax obligation is attracted only when the default is without reasonable cause, and a bona fide mistaken belief supported by the facts can negate the liability itself.

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