2020 (8) TMI 782 - HC - VAT and Sales Tax

Levy of penalty under clause (vii) of sub-section (1) of Section 58 of the VAT ACT - Non-payment of CST - HELD THAT - We do not find it appropriate to entertain these revisions. Even otherwise, we do take judicial notice that the pandemic that prevails in the country and the huge burden on respondent and others. We are also aware of the fact that the delayed payment made by the assessee also included the interest for the said period. Therefore, there is no financial loss that accrued to the revenue. It is only a penalty for belated payment that has been imposed. We find no good ground to entertain these revisions. We make it clear that this is purely on the facts and law of the present case and shall not act as a precedent - Revision dismissed.

Summary

Issues:
Penalty imposition under VAT Act and CST Act for delayed payment.

Analysis:
The judgment by the High Court of Uttarakhand involved the imposition of penalties under the VAT Act and CST Act for delayed payment by a company engaged in the manufacture and sale of paper products. The respondent company failed to deposit the admitted tax within the specified time, leading to a penalty being imposed by the assessing officer. The company challenged the penalty through appeals, resulting in a reduction by the first appellate authority. However, the Commercial Tax Tribunal set aside the first appellate authority's decision, prompting the department to file revisions.

The revisionist's counsel argued that the penalty was justified due to the company's habit of delayed payments and requested the court to set aside the tribunal's order. On the other hand, the respondent's counsel contended that interest on the delayed amount had been paid, urging leniency considering the financial situation and pandemic. After hearing both sides, the court decided not to entertain the revisions.

The court upheld the tribunal's decision, stating that the assessing officer and the first appellate authority erred in imposing the penalty. It noted the pandemic situation and the interest payment made by the company, emphasizing that there was no financial loss to the revenue. Consequently, the court dismissed the revisions, emphasizing that the judgment was based on the specific facts of the case and would not set a precedent.

The court clarified that the reasons applied to all four cases with similar issues, leading to the dismissal of the revisions. The judgment favored the assessee (respondent) over the revenue (revisionist), emphasizing the unique circumstances of the case and the absence of financial loss to the revenue due to the interest payment made by the company.