Penalty under luxury tax law requires a specific statutory default and a reasoned finding of no sufficient cause.

Penalty under section 8 of the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981 requires the authority to identify the exact statutory default relied on, such as failure to file a return, failure to pay tax with the return, non-compliance with notice, or concealment/inaccurate particulars, and to record a clear finding that the default occurred without sufficient cause. A bare statement that tax was not paid in full, or a cursory rejection of the assessee's explanation, is insufficient. Because the assessment and revisional orders did not specify the precise clause or properly examine the explanation, the penalty lacked factual foundation and was held unsustainable.

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Issues: Whether penalty under section 8 of the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981 could be sustained without a specific finding as to which clause of the provision was attracted and without recording that the non-payment was without sufficient cause and due to negligence.

Analysis: Section 8 permits penalty only in the defined situations of failure to furnish a return, failure to pay tax due with the return, failure to comply with a notice under section 7(2)(a), or concealment or furnishing of inaccurate particulars. The authority invoking the provision must therefore identify the precise clause relied upon and record a clear finding that the assessee's default was without sufficient cause. A mere statement that tax was not paid in full, or a summary rejection of the explanation offered, is not enough to justify penalty. Since the assessment and revisional orders did not specify the exact statutory default or examine the assessee's explanation in the proper manner, the levy lacked the necessary factual foundation.

Conclusion: The penalty was unsustainable and was set aside in favour of the assessee.

Ratio Decidendi: Penalty under a provision conditioned by distinct statutory defaults and the absence of sufficient cause cannot be imposed unless the authority records a specific, reasoned finding identifying the exact default and the basis for penalty.

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