Reasoned satisfaction for sales tax penalty is essential; mechanical maximum penalty under Kerala law was unsustainable.

Penalty under section 29A(4) of the Kerala General Sales Tax Act can be imposed only where the authorised officer forms a reasoned satisfaction, on relevant materials, that there was an attempt to evade tax. The provision is quasi-judicial in nature, and the authority must independently assess the gravity of the alleged default before fixing quantum. On the stated facts, the maximum penalty was imposed mechanically, without independent appraisal of the record or reasons justifying the extreme measure, so the penalty was not sustainable and the sustaining order was liable to be set aside.

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Issues: Whether penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 could be sustained on the facts found, and whether the maximum penalty was imposed without the required independent evaluation.

Analysis: Section 29A(4) permits penalty only where the authorised officer finds an attempt to evade tax due under the Act. The standard is not materially different from the approach governing penalty provisions under sections 19 and 45A of the Act, which require a reasoned satisfaction based on relevant materials. Penalty proceedings are quasi-judicial, the power is enabling and not compulsive, and the authority must consider the gravity of the alleged default before fixing the quantum. On the record, the maximum penalty was levied in a mechanical manner without independent appraisal of the materials or disclosure of reasons justifying the extreme measure.

Conclusion: The penalty under section 29A(4) was not justified, and the order sustaining it was liable to be set aside.

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