Tax computation must reflect appellate relief, and maximum penalty needs a finding of wilful or contumacious default.

Partial relief granted by the first appellate authority had to be reflected in the tax computation, so the assessed turnover and tax liability were required to be recomputed on the reduced basis. Penalty under section 14(4) was not automatic or mechanical; its quantum depended on the assessee's conduct, and the maximum penalty could not be sustained without a finding of wilful or contumacious default. The assessee therefore obtained relief on both the reassessment calculation and the penalty, with the revisions allowed in part.

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Issues: (i) whether the assessee was entitled to reduction of the assessed tax by giving effect to the partial relief already granted by the first appellate authority; and (ii) whether the maximum penalty under section 14(4) could be sustained in the absence of a finding of wilful or contumacious conduct.

Issue (i): whether the assessee was entitled to reduction of the assessed tax by giving effect to the partial relief already granted by the first appellate authority.

Analysis: The tax computation had overlooked the partial relief earlier granted by the appellate authority. Once that relief was taken into account, the turnover and the tax liability had to be recomputed on the reduced basis.

Conclusion: The assessed tax was required to be reduced, and the assessee succeeded on this issue.

Issue (ii): whether the maximum penalty under section 14(4) could be sustained in the absence of a finding of wilful or contumacious conduct.

Analysis: Penalty under section 14(4) was not automatic or a matter of course. In fixing its quantum, the conduct and attitude of the assessee were relevant, and the maximum penalty could not be imposed mechanically without a finding showing wilfulness or contumaciousness.

Conclusion: The maximum penalty was unjustified, and the penalty was liable to be reduced.

Final Conclusion: The assessee obtained relief both on the tax computation and on the penalty, resulting in a partial allowance of the revisions.

Ratio Decidendi: Penalty for escaped or under-assessed turnover is discretionary in quantum and cannot be imposed at the maximum rate without considering the assessee's conduct and making a finding of wilful or contumacious default.

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