2020 (10) TMI 51 - HC - VAT and Sales Tax

Levy of Penalty - non-deposit of admitted tax under the VAT Act and the CST Act within the time allowed - HELD THAT - The tribunal has rightly come to the conclusion that the assessing officer as well as the first appellate authority committed an error in imposing the penalty on the assessee (respondent herein), even though, the first appellate authority reduced the penalty by 50%, the same was unjustified. It is not found appropriate to entertain these revisions. Even otherwise, we do take judicial notice of the pandemic that prevails in the country and the huge burden on the 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 has accrued to the revenue. It is only a penalty for belated payment that has been imposed. There are no good ground to entertain these revisions - revision dismissed.

Summary

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

Analysis:
The High Court of Uttarakhand considered the common question of law and facts in four revisions regarding penalty imposition for delayed tax payment under the VAT and CST Acts. The respondent, a registered company, failed to deposit the admitted tax under the Acts within the stipulated time, leading to a penalty imposition by the assessing officer. The respondent appealed the penalty, resulting in a reduction by the first appellate authority, which was further challenged by the department in the Commercial Tax Tribunal. The Tribunal set aside the first appellate authority's order, prompting the department to file revisions.

The counsel for the revisionist argued that the penalty was justified due to the respondent's habitual delayed payments. Conversely, the respondent's counsel contended that interest on the delayed amount was paid, and considering the financial situation and the pandemic, a lenient view should be taken. After hearing both parties, the court found it inappropriate to entertain the revisions.

The court upheld the Tribunal's decision, stating that the penalty imposition by the assessing officer and the first appellate authority was erroneous. It acknowledged the pandemic situation and the interest payment by the respondent, ensuring no financial loss to the revenue. Additionally, the court referred to similar cases where penalty reduction was upheld, leading to the dismissal of the revisions in the present case.

In conclusion, the court dismissed the revisions, emphasizing that the decisions were based on the specific facts of the case and would not set a precedent. The judgment applied to all four cases with similar issues, ruling in favor of the assessee and against the revenue department.