Review and penalty under entry tax law remain discretionary where no apparent mistake or contumacious default is shown.

Review power under section 47 of the Bihar Finance Act, 1981 is confined to correcting a mistake apparent from the record and cannot be used to revisit a consciously taken assessment view merely because another view is possible. Penalty for delayed payment of admitted tax under the entry tax law is not automatic: the authority must exercise quasi-judicial discretion and may decline penalty where the default is technical, bona fide, or not marked by deliberate defiance of law. The review challenge also failed on sanction, limitation, and audit objection grounds, as prior sanction existed, the applicable rule distinguished successor-authority review, and an audit objection does not itself invalidate proceedings.

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Issues: (i) whether the earlier assessment orders could be reopened in review on the ground of a mistake apparent from the record; (ii) whether penalty for delayed payment of admitted tax under the entry tax law was mandatory or required the exercise of judicial discretion; and (iii) whether the review proceedings were vitiated for want of sanction, limitation, or because they were initiated on the basis of an audit objection.

Issue (i): whether the earlier assessment orders could be reopened in review on the ground of a mistake apparent from the record.

Analysis: Review under section 47 of the Bihar Finance Act, 1981 is confined to a mistake apparent from the record. A concluded assessment cannot be reopened merely because a different view on facts or law is possible on reconsideration. The earlier assessment orders had taken note of the statutory scheme, the litigation concerning the entry tax levy, the conduct of the dealer, and the payment of admitted tax, and had consciously declined to levy penalty. That approach, even if said to be erroneous, did not amount to an obvious or patent mistake on the face of the record.

Conclusion: The reopening in review was not justified on the ground of mistake apparent from the record.

Issue (ii): whether penalty for delayed payment of admitted tax under the entry tax law was mandatory or required the exercise of judicial discretion.

Analysis: Although section 16(9) of the Bihar Finance Act, 1981 prescribes a range for penalty, the power to impose penalty remains quasi-judicial. Penalty is not to be imposed mechanically merely because a default exists. The governing principle is that penalty ordinarily requires deliberate defiance of law, dishonest conduct, conscious disregard of obligation, or contumacious behavior. Where the breach is technical, venial, or bona fide, and where the dealer acted under a genuine belief amidst prolonged litigation over the validity and applicability of the levy, the authority may decline to impose penalty even if a minimum penalty is prescribed.

Conclusion: Penalty was not mandatory on the facts and no case for imposition of penalty was made out.

Issue (iii): whether the review proceedings were vitiated for want of sanction, limitation, or because they were initiated on the basis of an audit objection.

Analysis: The record showed prior sanction before the review order was passed, so the challenge on that ground failed. The limitation prescribed in rule 32(2) of the Bihar Sales Tax Rules, 1983 applies to review by the same authority, whereas rule 32(3) governs review by a successor authority and contains no such limitation. The audit objection merely drew the authority's attention to the alleged mistake and did not, by itself, invalidate the proceedings.

Conclusion: The review proceedings were not invalid on the grounds urged by the petitioner.

Final Conclusion: The penalty orders and consequential demand notices were quashed because the matter did not warrant imposition of penalty and the review could not stand on the alleged error in the earlier assessments.

Ratio Decidendi: A review power confined to correcting a mistake apparent from the record cannot be used to reappreciate a consciously taken assessment view, and penalty for tax default is not automatic where the breach is bona fide or technical and the authority retains judicial discretion.

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