Penalty reduction discretion under the Finance Act is not interfered with absent arbitrariness or a live question of law.

The penalty provisions under the Finance Act, read with the saving provision in Section 80, were understood as permitting reduction of penalty in appropriate cases. Where the Tribunal exercises that discretion on the facts and circumstances of the record and the reduction is not shown to be arbitrary, appellate interference is unwarranted. The High Court noted that the Tribunal had reduced the penalty after considering the record, and no independent question of law survived for interference.

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Issues: Whether the authority had power to reduce the penalty under the Finance Act, and whether the High Court could interfere with the Tribunal's exercise of discretion in reducing the penalty.

Analysis: The penalty provisions were considered together with the saving provision in Section 80. The reasoning accepted that the authority had power to reduce the penalty and that, where such discretion is exercised on the facts and circumstances of the case and is not shown to be arbitrary, interference in appeal is unwarranted. The Tribunal had recorded that it was reducing the penalty on consideration of the record, and no independent question of law survived.

Conclusion: The power to reduce the penalty existed, and the discretionary reduction made by the Tribunal did not call for interference.

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