Penalty for non-payment of tax due rejected where tax had not yet been ascertained under the statutory machinery.

Tax liability arose under the charging provisions, but tax was not treated as "due" for penalty purposes until it was ascertained by assessment or by the assessee under the return-based mechanism. A show-cause notice did not create a statutory obligation to pay, and a High Court stay order requiring returns did not substitute for the statutory process for determining liability. Penalty under section 16(1)(b) was therefore not sustainable because there was no failure to pay tax that had become due within the meaning of the Act.

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Issues: Whether penalty could be imposed under section 16(1)(b) of the Rajasthan Sales Tax Act for failure to pay tax allegedly due before assessment or return-based computation.

Analysis: Liability to tax arose under the charging provisions, but the Court held that tax could not be treated as "due" for the purposes of section 16(1)(b) until it was ascertained either by assessment under section 10 or by the assessee under section 7(2). The show-cause notice did not create a statutory basis for treating the amount as due, and the High Court stay order requiring returns did not amount to an obligation to deposit tax before the statutory machinery for determining tax liability had operated.

Conclusion: Penalty under section 16(1)(b) was not sustainable because there was no failure to pay tax that had become due within the meaning of the Act.

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