Discretionary penalty under entry tax law may be moderated where facts justify reduction within the statutory maximum.

Section 6(2) of the Karnataka Tax on Entry of Goods Act, 1979 confers discretion on the assessing authority to levy penalty up to one and a half times the tax assessed where escape from assessment is attributable to wilful non-disclosure. On the facts and circumstances noted, that discretionary power justified moderation of the penalty. The penalty was reduced to Rs. 2,00,000, and the remainder of the revisional order was confirmed.

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Issues: Whether the penalty imposed under Section 6(2) of the Karnataka Tax on Entry of Goods Act, 1979, deserved reduction in the exercise of statutory discretion.

Analysis: Section 6(2) confers discretion on the assessing authority to levy a penalty not exceeding one and a half times the tax assessed, where the escape from assessment is due to wilful non-disclosure. Considering the peculiar facts and circumstances of the case and the discretionary nature of the provision, the penalty was found liable to be moderated.

Conclusion: The penalty was reduced to Rs. 2,00,000, while the remainder of the revisional order was confirmed.

Ratio Decidendi: Where the statute confers discretion to levy penalty up to a specified maximum, the authority may reduce the penalty on the facts and circumstances of the case.

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