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M/S Syn Biotics v. The Sales Tax Commisioner - SALES/TRADE TAX REVISION No. 722 of 1993 [2003] RD-AH 414 (30 October 2003)


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M/s Syn Biotics ....Applicant


The Commissioner of Sales Tax ....Opp.Party

Hon'ble Rajes Kumar, J.

This revision is directed against the order of Tribunal dated 26.02.1993 relating to the assessment year 1991-92 by which Tribunal  has confirmed the levy of penalty under Section 15-A (1) (a) of the Act for Rs.20,000/-.  

For the month of September, 1991, return and admitted tax at Rs.1,91,051/- should have been deposited by 31.01.1991 but the same was deposited on 12.11.1991. Since the amount was deposited beyond the period specified under Section 7 read with Rule 41, notice under Section 15-A(1)(a) of the Act was issued. Applicant filed reply. Applicant stated that head office of the applicant was situated at Bombay and the branch office was receiving demand draft from Bombay head office and due to some disturbance at Bombay, demand draft could not be prepared within time at Bombay and as such could not be received by 31.10.1991. It is further stated that the applicant had sent letter by UPC on 31.10.1991 and sought time for deposit of tax. It was also submitted that delay in depositing the tax happened for the first time. Assessing authority had not accepted the plea of the applicant and had levied penalty at Rs.80,000/-. First appeal filed by the applicant was allowed in part and the amount of penalty was reduced to Rs.40,000/-.  In second appeal, Tribunal has confirmed the levy of penalty but reduced the amount of penalty to Rs.20,000/-.

I have heard Sri Ashok Kumar, learned counsel for the applicant  and learned Standing Counsel and perused the order of Tribunal.

Tribunal has not disputed that a letter was sent by UPC on 31.10.1991 for the extension of time and also not disputed the reasons given by the applicant that due to the disturbance at Bombay, demand draft could not be prepared in time and the said demand draft was not received in time at the branch office and therefore, the amount could not be deposited by 31.10.1991. Tribunal has levied the penalty only on the ground that for seeking time, applicant should appear before the authority concerned and should have moved an application for extension of time before assessing authority either on the same day or on the next day but since the same has not been done according to the Tribunal, applicant had committed default and liable to penalty.

Section 15-A(1)(a) of the Act reads as follows:

"(a) has, without reasonable cause failed to furnish the return of his turnover or to furnish it within the time allowed and in the manner prescribed, or to deposit the tax under this Act, before furnishing the return or alongwith the return as required under the provisions of this Act, or"

Penalty under Section 15-A(1)(a) can only be levied when the amount has been deposited beyond the specified time without any reasonable cause. It has been held by this Court in the case of Triveni Sheet Glass Works Limited, Allahabad Vs. CST, reported in 1999 NTN, Vol.14, 42 and in the case of Commercial Auto Sales, Allahabad Vs. CST, reported in 2000 NTN, Vol.17, 714  that the burden lies upon the revenue to establish the absence of reasonable cause.  In the present case, it has not been disputed that the applicant was getting the demand draft from its head office. The explanation that due to the disturbance at Bombay, the demand draft could not be prepared within the specified time has also not been disputed. It has also not been disputed that the applicant had sent a letter on 31.10.1991 by UPC and sought extension of time.  This application has not been rejected by the assessing authority. Further it has not been disputed that the delay in depositing the tax has been caused for the first time. In the circumstances stated above, it can not be said that there was no reasonable cause in depositing the tax beyond the specified period. Revenue has also failed to establish any malafide on the part of the applicant in depositing the tax beyond the specified period. For the delay in depositing of admitted tax, revenue is entitled for the interest under Section 8(1) of the Act @ 24%, which is sufficient to compensate interest of the revenue. Looking to the entire facts and circumstances of the case, I am of the view that the penalty levied under Section 15-A(1)(a) of the Act is not justified.

In the result, revision is allowed. Order of the Tribunal dated 26.02.1992 is set aside tne penalty is deleted.




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