Penalty for tax shortfall cannot be imposed where full tax disclosed in the return was already paid.

Penalty under section 10(6) of the Punjab General Sales Tax Act was held not leviable where the assessee had paid the full tax disclosed in the return. The court applied the settled principle that, once tax due on the basis of the return has been paid in full, penalty or interest cannot be imposed merely because a higher liability is later assessed. As the petitioner's payment in accordance with the return was undisputed, the penal demand could not stand and the issue was answered in favour of the assessee.

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Issues: Whether penalty under section 10(6) of the Punjab General Sales Tax Act, 1948 was leviable when the assessee had paid the tax in full in accordance with the return filed.

Analysis: The petition raised a pure question of law. The Court treated the issue as concluded by the Supreme Court decision relied upon, which held that where the full amount of tax due on the basis of the return has been paid, penalty or interest on the unpaid amount cannot be levied merely because a higher liability is later determined at assessment. Applying that principle, the Court noted that it was not disputed that the tax due from the petitioner had been paid according to the return.

Conclusion: Penalty under section 10(6) was not leviable on the facts of the case, and the issue was answered in favour of the assessee.

Final Conclusion: The petition was disposed of by adopting the settled legal position that timely payment of tax as disclosed in the return bars penal action on that basis alone.

Ratio Decidendi: Where an assessee has paid the full tax due on the basis of the return furnished, penalty cannot be imposed merely because additional liability is later alleged or determined.

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