Tax penalty after default requires post-default notice, reasoned discretion, and consideration of the dealer's explanation.

Penalty under section 26(2) of the Tripura Sales Tax Act is not automatic on mere non-payment; it can be imposed only after the dealer has actually become a defaulter on expiry of the original or extended due date. The authority must first issue a valid post-default show-cause notice, since a notice sent before default is only advance intimation and cannot replace the required notice. The power to extend time or allow instalments must be considered judicially, and any penalty order must show application of mind to the dealer's explanation and surrounding circumstances, particularly where the maximum penalty is imposed.

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Issues: Whether penalty under section 26(2) of the Tripura Sales Tax Act, 1976 could be sustained without a show-cause notice issued after the dealer had actually become a defaulter, and without a reasoned consideration of the dealer's request for extension of time and the relevant circumstances.

Analysis: Under section 26(1), default arises only on expiry of the original or extended date for payment, and the authority has discretion to extend time or permit instalments. The power to levy penalty under section 26(2) is not automatic on mere non-payment; it is a discretionary power to be exercised judicially after the dealer has become a defaulter. A notice issued before the due date expires is only an advance intimation and cannot substitute a post-default show-cause notice. The authority must also consider the explanation and surrounding facts, and the penalty order must disclose application of mind and reasons, especially when the maximum penalty is imposed.

Conclusion: The penalty was not sustainable because no valid post-default notice was issued and the order was a non-speaking exercise of power without proper consideration of the relevant circumstances.

Final Conclusion: The impugned penalty order was quashed, and the writ petition succeeded with costs.

Ratio Decidendi: Penalty for tax default cannot be imposed mechanically or automatically; it may be levied only after the dealer is actually in default, after observance of natural justice, and by a reasoned exercise of judicial discretion based on the relevant facts and circumstances.

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