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TMI Blog2008 (4) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the U.P. Tax on Entry of Goods Act, wherein the manufacturer was authorised to collect the entry tax at the time of delivering the goods to a person. It transpires that for the month of September 2000 to February 2001, the applicant had not deposited the entry tax within the prescribed time but subsequently deposited the amount along with interest at 24 per cent per annum. However, a notice was issued by the competent authority under section 15A(1)(a) of the Act to show cause, as to why, penalty should not be imposed upon the applicant for not depositing the entry tax within the specified period. The applicant submitted a reply and showed reasonable cause indicating that on account of financial crisis, the applicant could not deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, has filed the present revision. Heard Sri Piyush Agarwal, the learned counsel for the applicant and Sri Sanjeev Shankdhar, the Additional Chief Standing Counsel for the respondents. The admitted facts as called out from the record is, that the admitted tax was not deposited within the stipulated period but subsequently, the admitted tax was deposited along with interest at 24 per cent per annum. The record indicates that the delay ranged from a period of one month or four months. The cause shown for non-deposit was on account of financial crisis which the applicant underwent on account of the payment of cane dues pursuant to a recovery certificate. Before proceeding further, it would be relevant to refer to two provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit the tax due under the Act without a reasonable cause before furnishing the return. The return is required to be furnished under rule 41(1) of the Rules. Section 7(1A) of the Act provides that before submitted the return under sub-section (1) or along with the such return, the dealer is required to deposit in such manner as may be prescribed. The amount of the tax due is required to be deposited and when the assessing authority comes to the conclusion that the return furnished by the dealer was incorrect, it was open to the assessing authority to pass a provisional assessment order under rule 41(6) of the Rules and raise a demand. In the present case, provisional assessment proceedings has not been initiated by the assessing authority a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever has been placed by the Department to establish the absence of a reasonable cause. In Triveni Sheet Glass Works Limited, Allahabad v. Commissioner of Trade Tax [1999] 14 NTN 42, the court held: "Under the provisions of the U.P. Trade Tax Act, a dealer has to pay interest at 24 per cent. This is virtually an usurious rate of interest and no dealer would subject himself such heavy burden unless it is really hard pressed for money. Penalty under section 15A(1)(a) can be levied, if there is absence of reasonable cause which has to be established by the Revenue. In the present case, the dealer had established that it had no sufficient fund to enable it to deposit the money within the time prescribed. It has been repeatedly held by this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifling default. In Western India Match Co. Ltd. v. Commissioner of Sales Tax [1990] 76 STC 421 (All); [1989] UPTC 1074 and Eastern India Transformer and Switch Gear (P) Ltd. v. Commissioner of Sales Tax [1993] UPTC 212, this court has held that penalty should not be levied in such circumstances. The honourable Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211; [1972] 83 ITR 26 has held that penalty will not be imposed merely because it is lawful to do so and whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances." In Premier Vinyl Flooring Ltd. v. Commissioner of Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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