Penalty for late tax payment requires considered examination of explanation and conduct, not automatic imposition.

Penalty for delayed tax payment and late return filing cannot be imposed mechanically; it requires proper consideration of the assessee's explanation and surrounding circumstances. The Court noted that a short delay, payment before year-end, and the absence of contumacious conduct or deliberate defiance weighed against automatic penalty. It also criticised cyclostyled orders, contradictory reasoning, and reliance on matters not communicated to the assessee, reflecting non-application of mind. The matter was remitted for fresh consideration on whether any penalty was warranted and, if so, for lawful determination of the quantum.

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Issues: Whether the penalty imposed for delayed payment and late filing of returns was sustainable where the assessee's explanation and surrounding circumstances were not properly considered.

Analysis: The delay was short and the tax was paid before the end of the financial year. The Court found that the explanation offered by the assessee had not been considered in its proper perspective and that the quantum of penalty itself indicated this. Penalty is not automatic merely because the statute permits it; it is justified only where the conduct is contumacious or involves deliberate defiance of the statutory requirements. The use of cyclostyled orders containing contradictory or formulaic statements, together with reliance on matters not communicated to the assessee, showed non-application of mind. The failure to comply with a separate direction regarding advance tax could not justify treating the delayed payment in question as without reasonable excuse.

Conclusion: The penalty orders could not be sustained on the existing material and were set aside for fresh consideration.

Final Conclusion: The matter was remitted to the Sales Tax Officer to reconsider whether any penalty was called for and, if so, to determine the quantum in accordance with law.

Ratio Decidendi: Penalty for fiscal default requires a considered evaluation of the assessee's explanation and circumstances, and is not warranted where there is no contumacious conduct or deliberate defiance of the law.

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