Reasonable cause defeats CST penalty where disposal of machinery was justified and no guilty intention was shown.

Penalty under the Central Sales Tax Act for breach of the declaration requirement is attracted only where the statutory violation occurs without reasonable cause. The document states that the existence of reasonable cause is primarily a factual question. On the facts recorded, the assessee had sufficient cause for disposing of the machinery, and no guilty intention was established. In those circumstances, the Tribunal was justified in setting aside the penalty, and the penalty was not sustainable against the assessee.

---

---

Issues: Whether penalty imposed for breach of the declaration requirement under the Central Sales Tax Act was sustainable in the absence of reasonable cause.

Analysis: Penalty under section 10(d) of the Central Sales Tax Act is attracted where the statutory breach is without reasonable cause. The finding on reasonable cause is essentially factual. On the facts found, the assessee had shown sufficient cause for the disposal of the machinery, and no guilty intention was established. In these circumstances, the Tribunal was justified in setting aside the penalty.

Conclusion: The penalty was not sustainable and the finding is in favour of the assessee.

---