Reasonable cause defeats penalty for delayed return filing where the assessee shows a bona fide explanation and prompt tax payment.

Penalty for delayed filing of returns under section 7AA of the Rajasthan Sales Tax Act, 1954 is not automatic and applies only when the authority is satisfied that the default occurred without reasonable cause. The Tribunal found bona fide conduct where the returns had been sent to an advocate for filing and tax had been deposited without delay, and it also considered the assessee's past conduct and the circumstances of default. As the explanation was reasonable and an opportunity to explain the default was consistent with natural justice, no penalty was leviable and the revision petitions failed.

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Issues: Whether the assessee had reasonable cause for not furnishing the returns within the prescribed time, so as to avoid penalty under section 7AA of the Rajasthan Sales Tax Act, 1954.

Analysis: Penalty under section 7AA is attracted only when the assessing authority is satisfied that the dealer, without reasonable cause, failed to furnish the return within time. The levy is not automatic. The explanation that the returns had been sent to the advocate for filing, coupled with the fact that tax had been deposited without delay, supported the conclusion that the assessee had acted bona fide. The question whether the cause shown is reasonable is primarily one of fact, and the Tribunal had examined the circumstances and the past conduct of the assessee before recording a finding in its favour. The requirement of giving an opportunity to explain the default is also consistent with the principles of natural justice.

Conclusion: The assessee had reasonable cause, and no penalty under section 7AA was leviable. The finding of the Tribunal was justified and the revision petitions failed.

Ratio Decidendi: Penalty for delayed filing of returns can be imposed only when the authority is satisfied that the default was without reasonable cause; where the assessee establishes a bona fide explanation, penalty is not warranted.

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