Penalty discretion under tax law upheld where statutory limits and hearing safeguards existed; composite order valid for continuing default.

Section 46 of the Haryana General Sales Tax Act, 1973 was upheld because the penalty power was confined by statutory minimum and maximum limits, applied only where delay was without sufficient cause, and required a reasonable opportunity of hearing; the delegation was therefore neither excessive nor unguided. A continuing default in filing returns and depositing tax could also be dealt with through a composite penalty order, and separate notices or orders for each day of default were not required once the dealer had been afforded an opportunity to explain the lapse.

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Issues: (i) Whether section 46 of the Haryana General Sales Tax Act, 1973 conferred excessive delegation or an unguided discretion in the matter of imposing penalty for failure to file returns in time and to deposit tax, and (ii) whether a composite penalty order for the whole period of delay could be sustained without passing separate orders for each day's default.

Issue (i): Whether section 46 of the Haryana General Sales Tax Act, 1973 conferred excessive delegation or an unguided discretion in the matter of imposing penalty for failure to file returns in time and to deposit tax.

Analysis: The scheme of the Act and the rules provided the manner and time for furnishing returns and depositing tax. Section 46 prescribed only a narrow range of penalty, with a minimum and maximum limit, and required that penalty be imposed only where the default was without sufficient cause. It also incorporated the requirement of reasonable opportunity of hearing. In that setting, the discretion left to the assessing authority was not uncontrolled or unguided, but was confined within statutory limits and safeguarded by procedural fairness.

Conclusion: The challenge to the validity of section 46 failed and the provision was upheld.

Issue (ii): Whether a composite penalty order for the whole period of delay could be sustained without passing separate orders for each day's default.

Analysis: The default was treated as a continuing liability. Once the dealer had been given an opportunity to show cause on quantification, separate notices or separate orders for every day were not . The dealer had appeared before the authority on several occasions, took adjournments, and did not furnish any explanation or cause on the final hearing. In those circumstances, the composite order for the continuing default was competent.

Conclusion: The composite penalty order was valid and no separate daily orders were required.

Final Conclusion: The writ petition was rejected, and the penalty and consequential monetary liability under the Act were sustained.

Ratio Decidendi: A penalty provision is not invalid for excessive delegation where the legislature itself fixes the minimum and maximum limits, requires absence of sufficient cause, and provides an opportunity of hearing; and a continuing tax default may be dealt with by a composite penalty order once due opportunity to explain the default has been afforded.

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