9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1015 - HC - VAT and Sales TaxImposition of penalty - Section 34(8) of the U.P. VAT Act, 2008 - alleged delay in deposit of TDS amount - April, 2009 to March, 2010 - Held that - The facts being not in dispute and as have been noted above, it is clear that the default, if any, was cleared by the applicant-assessee together with interest about four years before issuance of the notice in the case of M/S Yadu Sugar Mill Ltd. Vs. The Commissioner Commercial Taxes 2018 (12) TMI 100 - ALLAHABAD HIGH COURT a similar position of facts had given rise to the same questions of law as are involved in the present revisions. In that case, the penalties were deleted. Since the essential facts of the present cases are identical and the questions of law involved in such facts have been answered in the negative i.e. in favour of the assessee and against the revenue.
Issues Involved:
1. Whether penalty under Section 34(8) of the U.P. VAT Act, 2008 is mandatory. 2. Whether justification to impose penalty survived when the assessee had cleared the default in payment of TDS amount together with interest before issuance of any notice. Issue-wise Detailed Analysis: Issue 1: Whether penalty under Section 34(8) of the U.P. VAT Act, 2008 is mandatory. The court examined whether the imposition of penalty under Section 34(8) of the U.P. VAT Act, 2008 is mandatory or discretionary. It was noted that the statutory language uses "may" and "shall" in different parts of the same sub-section. The term "may" suggests discretion, indicating that the assessing officer has the option to impose a penalty based on the circumstances. The term "shall" is used to indicate the mandatory nature of compliance once a penalty order is passed. The court emphasized that if the legislature intended to make the penalty mandatory in every case of default, it would have used "shall" in the first part of the sub-section as well. Therefore, the imposition of penalty is not automatic or mandatory but discretionary, depending on the facts and circumstances of each case. Issue 2: Whether justification to impose penalty survived when the assessee had cleared the default in payment of TDS amount together with interest before issuance of any notice. The court considered the scenario where the assessee had cleared the default in payment of TDS amount along with interest before the issuance of any penalty notice. It was observed that the assessee had deposited the defaulted amount and interest almost four years before the penalty notice was issued. The court referred to previous judgments, including the case of M/S Yadu Sugar Mill Ltd. Vs. The Commissioner Commercial Taxes, where penalties were deleted under similar circumstances. It was held that if the default is rectified before it comes to the notice of the assessing authority, and the revenue's loss is compensated, there is no justification for imposing a penalty. The court concluded that no prejudice is caused to the revenue if the default is cleared voluntarily by the assessee before detection, thus negating the need for a penalty. Conclusion: The court held that the imposition of penalty under Section 34(8) of the U.P. VAT Act, 2008 is discretionary and not mandatory. The penalty is not justified if the assessee clears the default along with interest before the issuance of a penalty notice. The court allowed the revisions in favor of the assessee, stating that no useful purpose would be served in keeping the revisions pending further. The questions of law were answered in the negative, favoring the assessee and against the revenue. No order as to costs was made.
|
