Actual tax paid governs penalty, while interest continues on delayed or unpaid tax balances under the sales tax regime.

Under the sales tax provisions, penalty had to be assessed on the basis of actual tax paid, not merely the tax shown in the return, and an unsupported penalty order could not justify retention of an excessive levy; the Tribunal's reduction of penalty and deletion of the related penalty and composition fee were therefore sustained. Interest remained payable on tax not paid within the prescribed time, and also on any unpaid balance left after a lump sum payment, so the interest levy was upheld. Both the appeals and cross-objections were dismissed.

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Issues: (i) Whether the Tribunal was justified in reducing the penalty under section 45(6) and deleting the penalty under section 45(4) and the composition fee under Rule 78. (ii) Whether interest was payable under section 47(4A)(a) and section 47(4A)(b) on delayed payment of tax and on the balance remaining after lump sum payment.

Issue (i): Whether the Tribunal was justified in reducing the penalty under section 45(6) and deleting the penalty under section 45(4) and the composition fee under Rule 78.

Analysis: The difference between tax payable and tax paid had to be computed on the basis of the actual tax paid by the assessee, not merely the tax shown in the return. The assessing authority had not given reasons for imposing penalty at 90%, and the Tribunal found that the assessee had paid the additional tax on receipt of subsidy. In the absence of any supporting discussion in the assessment orders, the Tribunal also deleted the penalty under section 45(4) and the composition fee under Rule 78.

Conclusion: The reduction of penalty to 10% and deletion of penalty under section 45(4) and composition fee under Rule 78 were upheld, in favour of the assessee.

Issue (ii): Whether interest was payable under section 47(4A)(a) and section 47(4A)(b) on delayed payment of tax and on the balance remaining after lump sum payment.

Analysis: Liability to interest arose for tax not paid within the prescribed time, and where lump sum payment still left a differential amount outstanding, interest continued to apply on the unpaid balance. The Tribunal declined to interfere with the levy of interest, and the Court found no reason to disturb that part of the order.

Conclusion: The levy of interest under section 47(4A)(a) and section 47(4A)(b) was upheld, against the assessee.

Final Conclusion: The penalty relief granted by the Tribunal was sustained, while the interest levy was also sustained, and both the tax appeals and the cross-objections stood dismissed.

Ratio Decidendi: For levy of penalty under the sales tax provisions, the actual tax paid must be considered, and a penalty order without reasons cannot justify retention of an excessive penalty; however, interest remains payable on tax not paid within the statutory time and on any unpaid balance after partial or lump sum payment.

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