2007 (8) TMI 690 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to imposition of penalty under section 16(9) of Bihar Finance Act, 1981 for delay in payment of admitted tax.

Analysis:
The case involved a writ application challenging the imposition of a penalty under section 16(9) of the Bihar Finance Act, 1981. The petitioner, engaged in distribution and sale of petroleum products, had deposited the admitted tax for a specific quarter after a delay. The assessing officer initiated proceedings for the delay in payment, leading to the imposition of a penalty. The petitioner argued that the penalty was unjust as there was no intentional or mala fide conduct on their part, citing legal principles that penalties should not be imposed unless there is dishonesty or deliberate defiance of the law. The petitioner also highlighted a case precedent to support their argument.

The State, represented by the Advocate-General, contended that the delay in payment amounted to wilful evasion of tax, justifying the imposition of the penalty. However, the court analyzed the facts and found no mens rea or deliberate delay in payment on the part of the petitioner. Considering the absence of intentional conduct and the legal principles discussed, the court concluded that the imposition of the penalty was unjustified and unsustainable in law.

Ultimately, the court allowed the application, setting aside the order imposing the penalty on the petitioner. No costs were awarded in this matter.