Judicial discretion in penalty quantum limits mechanical maximum levy for wilful turnover suppression under sales tax law.

Wilful suppression of turnover attracted penalty under Section 14(8) of the A.P. General Sales Tax Act, but the assessing authority was required to exercise discretion judicially in fixing the quantum. The Court held that the maximum penalty could not be imposed mechanically merely because the default was wilful. As the orders below showed confirmation of the highest levy without proper consideration of the facts and circumstances, the penalty was upheld in principle but reduced from five times the tax due to three times the tax due.

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Issues: Whether the penalty levied for wilful suppression of turnover under Section 14(8) of the A.P. General Sales Tax Act was sustainable in its quantum.

Analysis: The turnover suppression was concurrently found to be wilful, so the assessee fell within the penal provision. However, Section 14(8) did not mandate automatic levy of the maximum penalty in every case of wilful suppression. The assessing authority was required to exercise the statutory discretion judicially and fix an appropriate quantum after considering the facts and circumstances. The orders of the authorities below showed confirmation of the maximum penalty without a proper exercise of that discretion. In the facts of the case, especially having regard to the age of the assessment and the claim of bona fide belief, remand was avoided and the matter was decided on merits.

Conclusion: The penalty was held to be sustainable in principle, but the maximum levy of five times the tax due was found excessive and was reduced to three times the tax due.

Final Conclusion: The revision succeeded only to the extent of reducing the penalty quantum, while the finding of wilful suppression and liability to penalty was maintained.

Ratio Decidendi: Where a penal statute confers discretion as to quantum, the authority must exercise that discretion judicially on the relevant facts and circumstances, and the maximum penalty cannot be imposed mechanically merely because the default is wilful.

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