Penalty for non-remittance of collected tax upheld where monthly returns were not filed and further reduction was refused.

Failure to file monthly returns and remit collected tax was treated as conduct falling within Section 45A of the Kerala General Sales Tax Act, which permits penalty up to twice the tax sought to be evaded. The default was not regarded as a mere technical lapse because the tax collected from customers had not been paid over to the State even after notice. Financial stringency and closure of the establishment were not accepted as sufficient grounds to avoid the statutory penalty, and the revisional authority's reduction of the penalty to the amount of tax due was considered already lenient. No further reduction was warranted, with only limited relief indicated in respect of penal interest on timely compliance.

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Issues: Whether penalty under Section 45A of the Kerala General Sales Tax Act was sustainable for failure to file monthly returns and remit tax due, and whether the quantum of penalty called for further reduction.

Analysis: Failure to file returns and to pay tax due falls within the mischief of Section 45A, which authorises imposition of penalty up to twice the amount of tax sought to be evaded. The default was not a mere technical lapse, as the collected tax had not been remitted even after notice proposing penalty. Financial stringency and closure of the establishment were not accepted as sufficient grounds to avoid the statutory consequence, especially when the assessee retained tax collected from customers without paying it over to the State. The revisional authority had already taken a lenient view by reducing the penalty to the amount of tax due, and no further reduction was warranted.

Conclusion: The penalty was upheld, further reduction was declined, and the challenge failed, with only limited relief granted in respect of penal interest on timely compliance.

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