Penalty for delayed tax payment not leviable where instalment relief and extended time were granted and complied with.

Penalty under section 17(3)(b)(ii) of the M.P. General Sales Tax Act is not sustainable where the Commissioner has granted further time or instalments under section 22(4-A) and the tax is then paid in accordance with that relief. The Commissioner's satisfaction that the dealer could not pay within time, formed on the totality of circumstances, is a material circumstance in assessing whether the default was without sufficient cause. If payment is made within the extended period subject to those conditions, the basis for treating the original delay as penal does not survive. The reference was answered in favour of the assessee.

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Issues: Whether penalty under section 17(3)(b)(ii) of the M.P. General Sales Tax Act, 1958 could be sustained where the Commissioner had granted further time and instalments under section 22(4-A) and the tax was paid in accordance with that relief.

Analysis: The statutory condition for penalty under section 17(3)(b)(ii) is failure to comply with the prescribed payment requirement without sufficient cause. The Commissioner's order under section 22(4-A) is based on an assessment of the dealer's inability to pay within time and on the totality of the circumstances. That satisfaction bears directly on whether the default was without sufficient cause. Where tax is paid within the extended time and subject to the Commissioner's conditions, the basis for treating the default as penal does not survive.

Conclusion: Penalty under section 17(3)(b)(ii) was not leviable on the facts, and the answer to the reference was in favour of the assessee.

Ratio Decidendi: A Commissioner's grant of extension of time or instalments under the recovery provisions is a material circumstance in judging whether the dealer's failure to pay tax within the original time was without sufficient cause for the purpose of penalty.

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