Discretionary sales tax penalty requires bona fides review, relevant circumstances, and proper assessment of quantum before imposition.

Penalty under section 13(5) of the Orissa Sales Tax Act is discretionary and cannot be imposed automatically for default in payment. The authority must assess whether the assessee offered a plausible explanation, whether mala fides or conscious disregard of the statutory duty is shown, and whether all relevant circumstances support the exercise of discretion. The record indicated substantial receivables from Government departments and a failure by the authorities to record a clear finding on that claim, while the non-deduction contemplated by section 13-AAA was also a relevant factor bearing on bona fides. The quantum of penalty had to be considered with reference to the amount withheld and the period of default, and fresh consideration was required.

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Issues: Whether penalty under section 13(5) of the Orissa Sales Tax Act, 1947 was warranted on the facts, and whether the authorities had properly considered the assessee's explanation, the alleged non-deduction under section 13-AAA, and the quantum of penalty.

Analysis: Penalty under section 13(5) is discretionary and is not to be imposed automatically on every default in payment. The relevant enquiry is whether there was a plausible explanation for non-payment, whether mala fides or conscious disregard of the statutory obligation is shown, and whether all relevant circumstances bear upon the exercise of discretion. The materials indicated that the assessee had placed records showing substantial amounts receivable from Government departments, and the authorities did not record a clear finding on that claim. The record also showed that the mandatory deduction contemplated by section 13-AAA had not been carried out, which was a relevant circumstance bearing on the assessee's bona fides. The quantum of penalty also had to be assessed with reference to the amount withheld and the period of default, but these aspects were not properly evaluated.

Conclusion: The penalty order could not be sustained on the materials as considered and required fresh consideration by the revisional authority on both liability to penalty and the quantum, after taking all relevant materials into account.

Ratio Decidendi: Penalty for statutory default is discretionary and must be imposed only after a judicial assessment of bona fides, surrounding circumstances, and the appropriate quantum of penalty; failure to consider relevant materials vitiates the exercise of discretion.

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