JUDGMENT

Rohit Ranjan Agarwal. J.

Heard Sri Nishant Mishra, learned counsel for the revisionist and Sri A.C. Tripathi, learned Standing Counsel for the State.

2. This revision filed under Section 58 of the U.P. Value Added Tax Act, 2008 (hereinafter called as 'Act of 2008') assailing the order dated 27.02.2013 passed by the Commercial Tax Tribunal in Second Appeal No.26 of 2011 for the Assessment Year 2007-08.

3. The said revision was admitted on 10.01.2023 on following question of law:-

"(a) Whether in view of the judgment of the Hon'ble Court in the case of Lala Rajpai Rai and Associate Hospital v. C.S.T. reported in 1996 NTN Pg. 152 and Flex Vouchers Pvt. Ltd. v. C.T.T. reported in 2005 (41) STR Pg. 25 Flex (supra) the levy of penalty upon the applicant is justified?

(c) Whether in view of the facts and circumstances of the case, levy of penalty of Rs.34,86,000/- under Section 8(d)(6) of the U.P. Trade Tax Act, is justified?"

4. The brief facts involved in the present revision are that the revisionist is an educational institution imparting education. The primary and dominant function of the revisionist is to impart education to students, which is not a business activity.

5. According to the revisionist, it is neither a dealer or a contractor nor has appointed any contractor for execution of work contract. It is functioning under the control of the U.P. Government. Whenever, there is a requirement for any building to be used by students and teachers in the university campus, it is forwarded to the State Government to execute construction work. The State Government on receipt of the requirement allocates budget and transfers the same to the university and authorizes and appoints the U.P. Public Works Department for construction of building. The university had got the building constructed by Government Agency called as U.P. Rajkiya Nirman Nigam Ltd. For the relevant assessment year, U.P. Rajkiya Nirman Nigam was subjected to the assessment and an order under Section 7 (3) of the Act of 2008 was passed by the Deputy Commissioner (Assessment), Khand 8, Commercial Tax, Jhansi, wherein a liability of Rs.6,76,290/- was made against the Government Agency.

6. Revisionist-assessee received a notice on 19.07.2010 from the Taxing Authorities under Section 8(D)(6) of the U.P. Trade Tax Act, 1948 (hereinafter called as 'Act of 1948'). The said notice was replied by the revisionist assessee. The Deputy Commissioner on 28.09.2010 levied a penalty under Section 8(D)(6) of the Act of 1948 for Rs.34,86,000/-.

7. Aggrieved by the said order, a first appeal was filed before the Additional Commissioner, Jhansi which was dismissed by order dated 20.12.2010. Further, the assessee filed a second appeal before the Commercial Tax Tribunal, Jhansi which was also dismissed by order dated 27.02.2013, hence the present revision.

8. Learned counsel for assessee submitted that the levy of penalty under Section 8(D)(6) is discretionary and should not be levied mechanically. According to him, Section 8(D)(1) and (6) has to be read in harmony and the maximum penalty which can be imposed is double the amount of deduction which is to be made from the amount paid to a contractor at the rate of 4 %. According to him, the authorities without recording any finding had imposed maximum amount of penalty on the revisionist who is not a dealer and is an educational institution.

9. He next contended that the officers of the university were not aware of the provisions of Section 8 (D)(6) and the tax has already been paid b