Delayed tax penalty upheld where inability to recover tax from purchaser did not excuse statutory default.

Penalty for delayed deposit of admitted tax under the Trade Tax Act was upheld because interest on late payment compensates for retained tax, while penalty enforces the statutory payment schedule. The assessee's inability to recover the tax component from the purchaser, including where the purchaser was a Government company, was held immaterial and did not excuse default. The Tribunal's view that the explanation was not reasonable was sustained, but the penalty was moderated on the facts and reduced from 20% to 15%.

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Issues: Whether penalty for delayed deposit of admitted tax under the Trade Tax Act was justified, and whether payment of interest or non-recovery of sale price from the purchaser could dilute or exclude such penalty.

Analysis: Interest on delayed tax arises from the statutory obligation to compensate for retention of money lawfully payable, whereas penalty is imposed for breach of the statutory time schedule and default in payment. The explanation that the sale price and tax had not been recovered from the purchaser was held to be immaterial, and the fact that the purchaser was a Government company did not alter the liability. The Tribunal's reasoning that the assessee's explanation was not reasonable was upheld, but the quantum of penalty was considered fit for modification on the facts.

Conclusion: The levy of penalty was upheld in principle, but the penalty was reduced from 20% to 15%.

Final Conclusion: The revisions succeeded only to the limited extent of reduction in penalty, and the Tribunal's order was modified accordingly.

Ratio Decidendi: Interest for delayed tax and penalty for breach of statutory payment obligations operate in different fields, and inability to recover the tax component from the purchaser does not, by itself, furnish a sufficient excuse against penalty.

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