Reasonable cause for delayed tax payment defeats penalty where financial crisis was genuine and tax was later paid with interest.

Penalty for delayed deposit of admitted tax under the U.P. Trade Tax Act was held unwarranted where the dealer showed an undisputed financial crisis as the cause of delay. The court treated the explanation as a reasonable cause, noted that the tax was later deposited with interest, and applied the principle that penalty is not automatic but depends on a judicial assessment of whether the default was without reasonable cause. The penalty orders were set aside and the revisions were allowed.

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Issues: Whether penalty was leviable under section 15A(1)(a) of the U.P. Trade Tax Act, 1948 for delayed deposit of admitted tax when the dealer asserted financial crisis as the cause for delay.

Analysis: Penalty under section 15A(1)(a) can be imposed only where the failure to deposit tax within time is without reasonable cause. The dealer's explanation of financial crisis was not disputed, and the tax was ultimately deposited along with interest. In the circumstances, the default was treated as not reflecting mala fide conduct, and the existence of reasonable cause was accepted. The principle applied is that penalty is not automatic and must be justified on a judicial assessment of all relevant circumstances.

Conclusion: The penalty was not leviable, and the assessee succeeded on the issue.

Final Conclusion: The penalty orders were set aside and the revisions were allowed.

Ratio Decidendi: Where delayed payment of admitted tax is explained by a genuine and undisputed financial crisis and is followed by payment of tax with interest, penalty for failure to deposit tax within time is not warranted absent proof of want of reasonable cause.

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