Penalty re-computation under the correct statutory provision upheld where default and calculation basis were not properly supported.

Penalty imposed for non-payment of monthly tax and failure to furnish returns was required to be reassessed under the correct statutory provision, because the original computation lacked a proper basis under section 17(3)(c)(ii) of the M.P. General Sales Tax Act, 1958. The HC held that where the proved default attracts a different penal clause and the amount has not been properly justified, the appellate authority may remand the matter for redetermination and reimposition on a lawful calculation basis. The remand was therefore upheld and the reference was answered in favour of the Revenue.

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Issues: Whether the Appellate Deputy Commissioner was justified in remanding the matter for recalculation and reimposition of penalty under the proper provision, and whether the penalty could be levied under the clause applicable to default in payment of tax and failure to furnish return.

Analysis: The default found on the facts was non-payment of monthly tax and failure to furnish return, which attracted the penalty framework under section 17(3) of the M.P. General Sales Tax Act, 1958. The assessing authority had imposed penalty under section 17(3)(c)(ii) without disclosing a proper basis for computing the amount of Rs. 43,700. The appellate authority was therefore justified in holding that the penalty had to be redetermined under the correct statutory provisions and on a proper calculation basis.

Conclusion: The remand for redetermination of penalty was justified, and the reference was answered in favour of the Revenue.

Ratio Decidendi: Where penalty is imposed under an incorrect or inadequately supported statutory basis, the appellate authority may remand the matter for computation and reimposition under the correct penal provision applicable to the proved default.

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