Penalty for unpaid admitted tax upheld where a nil return omitted taxable turnover and failed to discharge the liability.

Penalty was exigible where a quarterly return showing nil taxable turnover was filed on time, but the assessee omitted taxable turnover on which tax was admittedly payable and failed to discharge the admitted tax liability. The return was treated as ineffective once the admitted tax remained unpaid, so the statutory condition precedent for penalty was satisfied. The Tribunal could consider the assessee's explanation on contumacy and, where appropriate, grant relief, but the basic liability to penalty remained established on the admitted facts.

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Issues: Whether penalty was exigible where the quarterly return showing nil taxable turnover was filed within time but the admitted tax on taxable turnover was not paid.

Analysis: The return was treated as ineffective because the assessee omitted taxable turnover on which tax was admittedly payable and did not discharge the admitted tax liability. Once the admitted tax was not paid, the return ceased to have legal effect and the statutory condition precedent for levy of penalty stood satisfied. The Tribunal could consider the explanation and, in an appropriate case, grant relief on the question of contumacy, but the basic liability to penalty remained established on the admitted facts.

Conclusion: The question was answered in the affirmative and the penalty was held exigible, against the assessee.

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