Penalty under sales tax law requires assessed tax or demand notice; no penalty lies where returns show no tax payable.

Section 23(1)(f) of the Assam General Sales Tax Act, 1993 permits penalty only for failure, without reasonable cause, to pay tax payable under Section 16(1) or under a notice of demand issued after assessment. Read with Rule 25, the scheme requires payment with the return only when the return itself shows tax payable on taxable turnover. Where the dealer's returns disclosed no taxable turnover and no tax payable, no duty arose to pay tax with the return. In that situation, the assessing authority had to complete assessment and serve a demand notice first; penalty could follow only on default thereafter. As no assessment or demand notice had been issued, the penalty orders were without jurisdiction and liable to be quashed.

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Issues: Whether penalty under Section 23(1)(f) of the Assam General Sales Tax Act, 1993 could be imposed when the dealer's returns disclosed no taxable turnover and no notice of demand or assessment had yet been made.

Analysis: Section 23(1)(f) authorises penalty only where a dealer fails, reasonable cause, to pay tax payable under Section 16(1) or under a notice of demand issued under Section 25. Read with Rule 25 of the Assam General Sales Tax Rules, 1993, the scheme requires payment along with the return only when tax is shown as payable on taxable turnover. Where the return shows no tax payable, the dealer is not obliged to pay tax with the return. If the assessing authority forms the view that tax is payable, it must first complete assessment and serve a notice of demand; only on default thereafter can penalty arise. In the present case, the returns for the relevant periods disclosed no tax payable, and no assessment or demand notice had been issued before the penalty orders.

Conclusion: The penalty orders were without jurisdiction and were liable to be quashed.

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