Reasoned discretion is mandatory when reducing statutory penalty for deliberate suppression of turnover; unreasoned reduction is arbitrary.

A discretionary reduction of a statutory penalty for deliberate suppression of turnover is unsustainable unless the authority records valid, specific reasons. The Tribunal upheld the assessments and found deliberate suppression, yet reduced the penalty without stating any basis for interference. Under the statutory scheme, the penalty was prescribed at one and a half times the disputed tax, so any departure from that measure required reasoned justification. In the absence of recorded reasons, the reduction was treated as arbitrary and liable to be interfered with, and the full penalty was restored.

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Issues: Whether the Appellate Tribunal was justified in reducing the statutory penalty imposed for suppression of turnover without recording specific reasons.

Analysis: The revision arose from the Tribunal's reduction of penalty despite upholding the assessments and confirming deliberate suppression of turnover. The statutory scheme under Section 13(3) of the Pondicherry General Sales Tax Act, 1967 provided for penalty at one and a half times of the disputed tax. A discretionary reduction of such penalty had to rest on valid reasons. As the Tribunal recorded no specific basis for interference after finding deliberate suppression, the exercise of discretion was held to be arbitrary. The earlier decision in an identical matter was treated as directly applicable and supported restoration of the full penalty.

Conclusion: The reduction of penalty was not justified and was liable to be interfered with.

Ratio Decidendi: Where a statutory penalty is reduced in exercise of discretion, the authority must record valid reasons; absent such reasons, the reduction is arbitrary and unsustainable.

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