Revisional interference with penalty reduction was unwarranted where the appellate authority found no deliberate default and fixed a lesser penalty.

The HC held that revisional power under section 22A of the Karnataka Sales Tax Act could not be used to disturb an appellate authority's discretionary reduction of penalty for delayed payment of monthly tax instalments under section 12-B(2). The assessee's explanation for delay was accepted on facts, and the appellate authority found no deliberate default, contumacious conduct, or conscious disregard of statutory obligation; it therefore reduced the penalty as the ends of justice were met by a lesser amount. Because the appellate order was neither arbitrary nor perverse nor otherwise legally unsustainable, the Commissioner had no justification to interfere, and the revisional order was set aside.

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Issues: Whether the Commissioner could interfere in revision under section 22A of the Karnataka Sales Tax Act, 1957, with the appellate authority's reduction of penalty imposed for delayed payment of monthly tax instalments under section 12-B(2) of the Act.

Analysis: The assessee's explanation for the delay, namely that the depot had been recently opened, sales were made on credit in a competitive market, and payment of sale consideration was delayed by customers, was accepted as factual by the authorities. The appellate authority found that there was no deliberate default, no contumacious conduct, and no conscious disregard of statutory obligation, and therefore reduced the penalty from Rs. 15,000 to Rs. 1,000 on the basis that the ends of justice would be met by a lesser penalty. The revisional power under section 22A could not be used to disturb such an exercise of discretion unless it was shown to be arbitrary, perverse, or otherwise legally unsustainable. No such infirmity was found in the appellate order.

Conclusion: The Commissioner had no justification to interfere with the appellate authority's discretionary reduction of penalty, and the revisional order was unsustainable.

Final Conclusion: The appeal succeeded and the revisional order was set aside, leaving the reduced penalty made by the appellate authority undisturbed.

Ratio Decidendi: Revisional interference is not warranted where the appellate authority's discretionary reduction of penalty is based on accepted facts, absence of deliberate default, and a non-arbitrary assessment of the proper quantum of penalty.

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