Mandatory prior notice and reasoned findings are required before penalty under the Tripura Sales Tax Act can be sustained.

Penalty under the Tripura Sales Tax Act was treated as a distinct, quasi-criminal proceeding requiring strict compliance with section 13. A hearing under section 13(2) is mandatory, and an effective opportunity to respond requires notice of the specific grounds proposed for penalty; notice issued only in assessment proceedings does not satisfy that requirement. The authority must also record reasoned findings showing the precise default and why no good and sufficient cause was established. On the stated facts, the penalty was unsustainable because the mandatory notice was not served and the order lacked the necessary reasons, so the penalty portion was quashed.

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Issues: Whether the penalty imposed under the Tripura Sales Tax Act, 1976 was sustainable when no notice under section 13(2) had been served and the order did not record reasons for the levy.

Analysis: Penalty under section 13 is a distinct and independent proceeding from assessment and can be imposed only on satisfaction of the statutory grounds under section 13(1). The statutory scheme makes a hearing under section 13(2) mandatory, and an effective opportunity requires notice informing the dealer of the proposed basis for penalty. A notice issued in assessment proceedings under section 9(2) does not satisfy this requirement. The imposition of penalty is not automatic and, being quasi-criminal in nature, must rest on judicious exercise of discretion, consideration of the explanation offered, and findings showing the precise nature of default and the absence of good and sufficient cause.

Conclusion: The penalty was unsustainable because the petitioner was not served with the mandatory notice contemplated by section 13(2) and the order failed to record the necessary findings and reasons. The penalty portion of the order was therefore quashed.

Ratio Decidendi: Penalty under a taxing statute, where the statute mandates prior hearing, cannot be imposed unless the assessee is given an effective opportunity to meet the specific grounds proposed and the authority records reasoned findings showing a wilful or unjustified default.

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