Concealment penalty under sales tax law was unwarranted where tax was later paid and transactions were fully disclosed.

Penalty for non-collection and non-payment of sales tax was held unwarranted where the default arose only during a short intervening period after a statutory amendment, the due tax was later deposited before the penalty order, and the transactions were fully disclosed in the books of account. The court treated the absence of ulterior motive, together with frequent and complex tax-law changes, as material in assessing concealment. For penalty under the concealment provision, the department had to establish something more than a mere default, and that threshold was not met on these facts.

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Issues: Whether penalty under section 25(1) read with section 61 of the Sales Tax Act was justified for non-collection and non-payment of tax during the short intervening period after the statutory amendment, despite subsequent deposit of the due tax and disclosure of the transactions in the books of account.

Analysis: The liability arose only for a short intervening period after the amendment deleting tobacco from the relevant category and before the State notification enhancing the tax position. The respondent had deposited the due tax before the penalty order and the transactions were fully recorded in the books of account. In such circumstances, the absence of ulterior motive and the complexity and frequent changes in tax law were material. For imposing concealment penalty, something more than a mere default had to be established by the Department.

Conclusion: Penalty was not warranted on the facts, and the deletion of penalty was ; the revision failed.

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