IMPORTANT POINT
Penalties for late tax filings must be proportionate and not imposed mechanically, especially when tax is paid with interest.

JUDGMENT :

Ritu Bahri, C.J.

The revisionist- Commercial Tax, Uttarakhand has come up in revision against the order dated 26.03.2016 (Annexure-5), passed by the Commercial Tax Tribunal, Uttarakhand, Dehradun.

2. Brief facts in all the three cases are that the respondent- M/s Lakshit Fashion Pvt. Ltd. had to file his quarterly returns for the assessment year 2014-15. These returns had to be filed by 31.07.2014, 31.10.2014 and 30.01.2015. However, the same were fled after the delay of 28 days, 27 days and 25 days.

3. Vide order dated 25.04.2015, the Assessing Authority passed penalty orders taking a view that the assessee has knowingly violated the provisions of Section 58(1)(iv) by filing the returns of the relevant three quarters late. The Assessing Authority imposed the maximum penalty (50% of the amounts of admitted tax payable) for the relevant first, second and third quarters to the tune of Rs.1,29,686/-, Rs.1,20,984/- and Rs.1,18,816/- respectively.

4. The Assessee filed first appeals on 25.04.2015, and vide order dated 29.12.2015, the appeals were allowed by the Joint Commissioner (Appeal)-I, Commercial Tax, Uttarakhand Head Quarter, Dehradun, and he reduced the penalty from 50% to 25%, i.e. to the tune of Rs.64,584/-, Rs.60,492/- and Rs.59,408/- for the relevant three quarters.

5. Against the order dated 29.12.2015, both, the assessee and the Commercial Tax Department have preferred the second appeals before the Commercial Tax Tribunal, Uttarakhand.

6. The Tribunal proceeded to decide these appeals by examining the penalty proceedings under Section 58(1)(iv). Relevant portion of Section 58 is as under:-

“Section 58: Offence and Penalties:-

(1) If the assessing authority is satisfied that any dealer or other person has committed the offence in any clause of column (1) of the following chart it may, after such enquiry as deemed necessary, such dealer or person shall pay, by way of penalty, in addition to the tax, if any, payable by mentioned in the related column (2), namely-

7. The Tribunal examined the facts that for the first quarter, i.e. for the months of April, May and June, 2014, the tax was deposited late by 08 days, 04 days and 30 days respectively.

(i) For the second quarter, i.e. for the months of July, August, 2014, the tax was deposited with a delay 01 day and 06 days, and the tax for the month of September, 2014 was deposited within time.

(ii) With respect to the third quarter, i.e. for the months of October, November and December, 2014, the assessee had deposited the admitted tax for the months of October and December within time, and the admitted tax for the month of November, 2014 was deposited with a delay of 02 days.

8. The Tribunal held that that on account of the delay, the Assessing Authority was correct in initiating the penalty proceedings under Section 58(1)(iv).

9. With respect to the quantum, the Tribunal while examining the imposition of penalty, held that out of the nine relevant months of the relevant quarters, the due admitted tax of the three months has already been deposited by the assessee within time prescribed, and with respect to the remaining months, the returns were filed in the same financial year and the amount of interest has already been deposited by the assessee. The penalty was reduced to 15% of the admitted tax payable by the assessee, and the appeals of the assessee were partly allowed. The penalty for the first quarter for the assessment year 2014-15 was determined at Rs.38,751/-; for the second quarter Rs.36,295/-, and; for the thi