1973 (3) TMI 123 - HC - VAT and Sales Tax

Summary

Issues:
Imposition of penalty under section 15-A(I)(a) of the U.P. Sales Tax Act for failure to deposit admitted tax along with the return.

Analysis:
The judgment pertains to a reference under section 11(1) of the U.P. Sales Tax Act regarding the imposition of a penalty on an assessee for not depositing the admitted tax along with the return for the assessment year 1967-68. The Sales Tax Officer imposed a penalty under section 15-A(I)(a) of the Act, which was later reduced on appeal but not cancelled. The revising authority accepted the assessee's plea that the penalty was illegal as it was not covered by section 15-A(I)(a) of the Act. The primary question referred was whether the penalty imposition was justified in the given circumstances. Section 15-A of the Act provides for penalties for failure to file returns, specifically mentioning the consequences for not furnishing the return within the prescribed time and manner.

The court analyzed the provisions of section 7 and rule 41 of the Act to determine the obligations imposed on the assessee. Section 7(1) mandates the filing of a return within the specified time and manner, while section 7(1-A) requires the deposit of tax due on the turnover shown in the return before or at the time of filing. Rule 41 further details the submission of returns and assessment procedures, emphasizing the distinction between filing the return and depositing the tax. The court highlighted that these requirements are independent of each other, and the failure to pay the admitted tax may lead to provisional assessment under rule 41(3) but does not invalidate the return.

The court emphasized that the furnishing of the return and the deposit of tax are separate obligations, with the non-deposit of tax not rendering the return invalid or not in the prescribed manner. It clarified that the information regarding tax payment in the return is crucial for assessment purposes but does not impact the validity of the return itself. Ultimately, the court answered the question in the negative, favoring the assessee and rejecting the department's imposition of the penalty. As there was no representation from the assessee, no costs were awarded, and the reference was answered in the negative.

This judgment underscores the importance of distinguishing between the obligations of filing a return and depositing tax under the U.P. Sales Tax Act, highlighting that non-payment of tax does not invalidate the return or warrant penalty under section 15-A(I)(a) unless specifically provided for in the Act. The court's interpretation of the statutory provisions clarifies the legal requirements for compliance with tax assessment procedures and emphasizes the need for adherence to prescribed guidelines without conflating distinct obligations.