Statutory penalty for late sales tax payment survives prosecution and belated payment, absent statutory protection or proved reasonable cause.

Penalty under section 45(6) of the Gujarat Sales Tax Act operates independently of prosecution for breach of rule 31, because the Act and Rules contemplate separate consequences for separate defaults. Earlier authority on a different statutory scheme does not displace the earlier High Court view where the legal setting and issue differ. Belated payment of tax before assessment does not cure the default where the statute requires full payment with the return. The first proviso to section 45(6) applies only when assessed or reassessed tax exceeds tax already paid by more than 20 per cent, and financial stringency is a fact-specific plea that must be proved as reasonable cause.

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Issues: (i) Whether penalty under section 45(6) of the Gujarat Sales Tax Act, 1969 could be imposed despite prosecution for contravention of rule 31 of the Gujarat Sales Tax Rules, 1970. (ii) Whether the decision in Commissioner of Sales Tax v. Radhakisan affected the applicability of the earlier High Court decision in Shri Laxminivas Brijlal Rungta v. O.C. Shah. (iii) Whether section 45(6) could be invoked even though the tax for the first three quarters had been paid before assessment. (iv) Whether the first proviso to section 45(6) restricted the penalty to 18 months in the assessee's case. (v) Whether financial stringency constituted reasonable cause for non-payment of tax.

Issue (i): Whether penalty under section 45(6) of the Gujarat Sales Tax Act, 1969 could be imposed despite prosecution for contravention of rule 31 of the Gujarat Sales Tax Rules, 1970.

Analysis: The scheme of the Act and the Rules contemplated distinct consequences for different defaults. The prosecution related to breach of the rule governing payment, while the penalty provision operated independently under the Act. The earlier High Court decision on analogous provisions had already recognised that prosecution for breach of the rules did not exclude penalty under the Act.

Conclusion: The issue was answered in favour of the Revenue.

Issue (ii): Whether the decision in Commissioner of Sales Tax v. Radhakisan affected the applicability of the earlier High Court decision in Shri Laxminivas Brijlal Rungta v. O.C. Shah.

Analysis: The Supreme Court decision dealt with the validity of discretionary choice between penalty and prosecution under a different statutory scheme, whereas the earlier High Court ruling concerned simultaneous operation of prosecution for rule breach and penalty under the Act. The two cases turned on different statutory settings and different legal questions.

Conclusion: The issue was answered in favour of the Revenue.

Issue (iii): Whether section 45(6) could be invoked even though the tax for the first three quarters had been paid before assessment.

Analysis: Section 45(6) applied where a dealer failed to pay the whole amount of tax required by section 47(2). The statutory obligation was to pay the full tax due along with the return, and belated payment before assessment did not remove the default already committed. The fact that some amounts were later paid did not alter the applicability of the penalty provision.

Conclusion: The issue was answered in favour of the Revenue.

Issue (iv): Whether the first proviso to section 45(6) restricted the penalty to 18 months in the assessee's case.

Analysis: The proviso applied to cases where the assessed or reassessed tax exceeded the sum already paid by more than 20 per cent. The present penalty was not founded on such excess assessment but on failure to pay tax when initially due. The statutory condition for invoking the proviso was therefore absent.

Conclusion: The issue was answered in favour of the Revenue.

Issue (v): Whether financial stringency constituted reasonable cause for non-payment of tax.

Analysis: The acceptability of financial stringency depended on the facts of each case. On the facts found, the assessee had not established a reasonable excuse, and the surrounding circumstances showed that the tax dues were not given precedence. The plea could not displace the statutory default.

Conclusion: The issue was answered in favour of the Revenue.

Final Conclusion: The reference was disposed of by upholding the revenue's position on all the questions referred, and the assessee failed on the merits of the statutory penalty challenge.

Ratio Decidendi: A dealer's belated payment before assessment does not wipe out the statutory default where the Act requires full payment along with the return, and the availability of penalty is not excluded by simultaneous prosecution for a separate rule breach unless the statute so provides.

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