Penalty cancellation under Bombay Sales Tax Act bars fresh reimposition on the same cause after appellate setting aside.

Under section 55(6)(b) of the Bombay Sales Tax Act, 1959, the appellate authority's power in penalty matters is limited to confirming, cancelling or varying the penalty order and does not include remand for fresh adjudication. Where the appellate authority sets aside a penalty order, that setting aside operates as cancellation, not as a direction for reconsideration. The assessing authority therefore lacks jurisdiction to revive the same penalty by issuing a fresh order on the same cause after cancellation by appeal, and the attempt to reimpose the penalty was rejected.

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Issues: Whether, after an appellate authority sets aside a penalty order under section 55(6)(b) of the Bombay Sales Tax Act, 1959, the assessing authority can initiate fresh penalty proceedings and reimpose the same penalty.

Analysis: The relevant appellate power under section 55(6)(b) is confined to confirming, cancelling, or varying an order imposing penalty or interest. Unlike the provision governing assessment orders, it does not confer power to set aside a penalty order and remand the matter for fresh adjudication. The omission of remand power in penalty matters is deliberate, and the setting aside of a penalty order in such an appeal can only mean its cancellation. Once the penalty is cancelled by the appellate authority, the original authority has no jurisdiction to revive the same penalty by issuing a fresh order on the same cause.

Conclusion: The assessing authority had no power to reimpose the penalty by a fresh order after the earlier penalty order had been set aside; the question was answered against the Revenue and in favour of the assessee.

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