Penalty for non-wilful tax default must be justified; maximum statutory penalty cannot be imposed mechanically.

Where a penalty for non-wilful failure is capped by statute at not exceeding one-half of the tax or fee due, the authority must give reasons before selecting the maximum within that ceiling. The text states that once the failure was found not wilful, the statutory limit applied, but no circumstances were shown to justify the highest permissible penalty. The penalty was therefore considered excessive and was reduced to one-fourth of the tax due.

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Issues: Whether, under clause (b) of sub-section (8) of Section 14 of the Andhra Pradesh General Sales Tax Act, 1957, the penalty, where the failure was found to be not wilful, could be sustained at the maximum permissible level or required reduction.

Analysis: The provision capped the penalty in cases of non-wilful failure at not exceeding one-half of the tax or fee due. The finding that the failure was not wilful justified invocation of the limited statutory ceiling, but no reasons were shown for imposing the maximum amount within that ceiling. In the absence of circumstances supporting the highest permissible penalty, the quantum was liable to be moderated.

Conclusion: The penalty could not be sustained at the maximum level and was reduced to one-fourth of the tax due.

Ratio Decidendi: Where the statute prescribes a maximum penalty for non-wilful failure, the authority must justify imposition of the maximum and cannot apply it mechanically without reasons.

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