Penalty for statutory non-compliance requires a specific finding of breach before section-based sanction can stand.

Penalty under section 16(7) of the HP VAT Act, 2005 cannot be sustained unless the authorities first record a specific finding that the taxpayer failed to comply with the payment requirement in section 16(4). Where that foundational breach is not established, the penal order lacks legal basis and is liable to be set aside. The matter was remitted for fresh consideration in accordance with law, with the assessing authority required to apply the relevant principles governing imposition of penalty and exercise of discretion judicially.

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Issues: (i) Whether penalty under sub-section (7) of section 16 of the HP VAT Act, 2005 could be sustained without a specific finding on compliance with sub-section (4) of section 16.

Analysis: The penalty provision under section 16(7) is triggered only on failure to comply with the payment requirement in section 16(4). The authorities had not recorded any specific finding on the applicability or breach of section 16(4) before invoking penalty under section 16(7). In the absence of such foundational finding, the penal orders lacked the necessary legal basis and could not be sustained. The matter also required reconsideration in the light of the principles governing imposition of penalty and the need for judicially exercised discretion.

Conclusion: The penalty orders were unsustainable and the matter was remitted to the assessing authority for fresh after considering the relevant legal principles.

Final Conclusion: The petitioner obtained relief, with the impugned orders set aside and the case sent back for reconsideration in accordance with law.

Ratio Decidendi: A penalty provision conditioned on breach of a statutory compliance requirement cannot be invoked without a specific finding establishing breach of that precondition, and a penal order founded on such omission is liable to be set aside and reconsidered afresh.

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