JUDGMENT R. K. PATRA, ACJ. — Is the Sales Tax Officer obliged to impose the maximum penalty prescribed under Sub-sec. (6) of Sec. 13-AA of the Orissa Sales Tax Act, 1947 ? This is the short question that arises for consideration in this writ petition filed by the Executive Engineer, Roads and Building Division, Sambalpur. 2. The facts necessary for adjudication of the above ques¬tion may be delineated : The petitioner entrusts execution of different works to various contractors under his Division. Sub-Sec. (1) of Sec. 13-AA of the Orissa Sales Tax Act, 1947 (hereinafter referred to as ‘the Act’) requires that any person responsible for paying any sum to any contractor for carrying out any works contract which involves transfer of property in goods shall at any time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or any other mode deduct an amount towards sales tax equal to four per cent of such sum of works contract if its value exceeds rupees one lakh. Under Sub-sec. (3) thereof, the amount deducted from the bills or invoice is required to be deposited into a Govern¬ment Treasury within one week from the date of deduction in such form or challan as may be prescribed. Rule 37-A of the Orissa Sales Tax Rules, 1947 prescribes the procedure of deposit into the Government treasury (vide Form - XI). Sub-sec. (6) thereof lays down that if any person contravenes Sub-secs. (1) or (2) or (3) or (5b), the Sales Tax Officer shall after giving him an opportunity of being heard by order in writing impose on such person penalty not exceeding twice the amount required to be deducted and deposited by him into Government treasury. The Sales Tax Officer in letter No. 4447/CT. dated 16.4.1999 (Annexure-3) called upon the petitioner to state as to why penalty under Sub-sec. (6) of Section 13-AA of the Act shall not be imposed on him for wilful withholding of deposit of tax deducted at source amounting to Rs. 86,997/-. Despite service of notice on him, the petitioner did not file any cause. In the circumstances, the Sales Tax Officer imposed a penalty of Rs. 1,73,994/- under Sub-sec. (6) of Section 13-AA of the Act shall not be imposed on him for wilful withholding of deposit of tax deducted at source amounting to Rs. 86,997/-. Despite service of notice on him, the petitioner did not file any cause. In the circumstances, the Sales Tax Officer imposed a penalty of Rs. 1,73,994/- under Sub-sec. (6) of Section 13-AA of the Act in his letter No. 4698/CT dated 28.4.1999 (Annexure-4) by indicating as follows : “You are called upon to state the reason of the non-remittance of the T.D.S. amount of Rs. 86,997.00 relating to the year 1998-99 which was required to be deposited to the Government Treasury within one week from the date of deduction as per provi¬sion of Sec. 13(A)(A)(3) of the Orissa Sales Tax Act, failing which penalty not exceeding twice the amount required to be deducted and deposited by you will be imposed in accordance to Sec. 13(A)(A)(6) of the O.S.T.Act for such wilful withholding of deposit of T.D.S. amount. Though the said letter was served on you on Dt. 16.4.1999 as per A.D.kept in the file neither you appeared nor effected appearance through any authorised person to state the reasons of such wilful withholding of Government reve¬nue in breach of the provision of the O.S.T.Act. Hence it is ascertained that you have no reason to state in regards to contravening the provision of Sec. 13(A)(A)(3) of the O.S.T.Act, compelling me to impose penalty which is to be recovered from you as your personal liability.” Against the said imposition of penalty, the petitioner preferred revision before the Commissioner of Commercial Taxes who by order dated 17.8.1999 (Annexure-6) upheld the imposition of penalty to an amount of Rs. 1,00,000/-. 3. Counsel for the petitioner contended that payment of tax depends on allocation of fund by the State Government to the petitioner’s Division and for the year in dispute (1998-99), tax could not be deposited in time for inadequate allocation of fund. On 31.3.1999 when funds were received, the entire amount of Rs. 86,997/- was paid in favour of the Sales Tax Department by way of bankers cheque on that very day. Since payment has been made within the financial year, no penalty could have been imposed. 4. As it appears, in course of hearing of the revision before the Commissioner a statement was filed on behalf of the petitioner regarding deduction of tax at source. Since payment has been made within the financial year, no penalty could have been imposed. 4. As it appears, in course of hearing of the revision before the Commissioner a statement was filed on behalf of the petitioner regarding deduction of tax at source. The Commissioner found that the petitioner made payment to different contractors on 13.7.1998, 27.9.1998, 11.11.1998, 26.11.1998, 3.12.1998, 27.12.1998, 17.1.1999, 25.1.1999 and 20.3.1999. Out of such payment, only in respect of the payment made to the contractors on 30.3.1999, the deduction at source was made and deposited in the shape of bankers cheque. Although in the months of July, 1998, September, 1998, November, 1998, December, 1998 and Janu¬ary, 1999 payments were made to the contractors, no deduction of sales tax was made at the source. Under Sub-secs. (1) and (3) of Sec. 13-AA the petitioner was bound to make deduction towards sales tax from the bills of the contractors and deposit the same into the Government treasury within one week from the date of such deduction. Although he made payment to the contractors as indicated above, he did not deduct the sales tax from their payments at the source. There is therefore no doubt that he contravened Sub-sec. (1) and Sub-sec. (3) of Section 13-AA of the Act and incurred the liability of payment of penalty. 5. Learned counsel contended that under Sub-sec. (6) of Sec. 13-AA although the outer limit of penalty is prescribed, in a given circumstance the Sales Tax Officer has the discretion to modulate the imposition of penalty. On due consideration, we find substance in this submission. Under Sub-sec. (6) of Sec. 13-AA penalty not exceeding twice the amount required to be deducted and deposited is imposable on the person contravening the provisions of Sub-secs. (1) or (2) or (3) or (5b). The words “not exceeding twice the amount” indicate the outer limit of penalty. The Sales Tax Officer has not ascribed any reason as to why the maximum penalty prescribed under law should be imposed on the petitioner. The Commissioner although has reduced the quantum of penalty, has not given any specific reason for it. 6. For the aforesaid reasons, we uphold the finding that the petitioner incurs the liability of penalty under Sub-sec. (6) of Sec. 13-AA of the Act. The aforesaid provision gives a wide discretion to the Sales Tax Officer to impose penalty for contra¬vention of Sub-secs. 6. For the aforesaid reasons, we uphold the finding that the petitioner incurs the liability of penalty under Sub-sec. (6) of Sec. 13-AA of the Act. The aforesaid provision gives a wide discretion to the Sales Tax Officer to impose penalty for contra¬vention of Sub-secs. (1) or (2) or (3) or (5b). The discretion is however a judicial one and not an arbitrary exercise of the power. What should be the quantum of penalty, cannot be exhaustively enumerated. It depends upon the facts peculiar to each individual case. Since the Sales Tax Officer has not given any reason as to why the petitioner should be inflicted with the maximum penalty (in absence of any reason ascribed even by the Commissioner when he reduced the penalty), we are inclined to remit the matter to him to consider the question relating to the imposition of the extent of penalty on the petitioner. We order accordingly. 7. For this purpose, the petitioner will appear before the Sales Tax Officer on 1st of March, 2001 and file his reply. If any such reply is filed, the Sales Tax Officer will consider and dispose of the same according to law. We make it clear that this inquiry by the Sales Tax authorities is confined only to the quantum of penalty. The writ petition is allowed. CH. P. K. MISRA, J. I agree. Petition allowed.