IMPORTANT POINT
The imposition of penalties for late tax payments must be reasonable and proportionate, with discretion exercised judiciously by the assessing authority.

JUDGMENT :

Ritu Bahri, C.J.

For the reasons stated in the affidavit(s), filed in support of the delay condonation application(s), the same are allowed, and the delay in filing the present revisions is condoned.

2. The revisionist-Commercial Tax, Uttarakhand has come up in revision(s) against the judgment of the Commercial Tax Tribunal, Uttarakhand, Dehradun, dated 23.02.2016 (Annexure-1).

3. Facts are being taken from Commercial Tax Revision No.33 of 2017.

4. Brief facts in all the cases are that the respondent-M/s Himalaya Polytech Pvt. Ltd. is a registered dealer under the Value Added Tax Act and is engaged in the business of manufacture of pet bottles from plastic, polymer and grains. The dealer made a delay in payment of the tax due for the fourth quarterly period for 2013.

5. Vide order dated 31.10.2013 (Annexure-2), penalty of Rs.2,10,904/-was imposed on the amount of tax due, which was Rs.4,21,807/-, which was the maximum penalty (50%). Against the order dated 31.10.2013 (Annexure-2), the respondent-M/s Himalaya Polytech Pvt. Ltd. preferred appeal before the Joint Commissioner, Commercial Tax, which was allowed on 08.06.2015 and the penalty imposed was reduced to Rs.1,05,452/-. The penalty was reduced from 50% to 25%. In the second appeals preferred by the Assessee, the Tribunal further reduced the penalty from 25% to 10% vide order dated 23.02.2016 (Annexure-1). Against the order dated 23.02.2016 (Annexure-1), the revenue has come up in these revisions.

6. Learned Brief Holder for the revisionist has argued that as far as the quantum of penalty is involved, it is governed by Section 58(1)(vii)(b) of the Uttarakhand Value Added Tax Act, 2005. The minimum penalty is 10% of the admitted tax, and 50% is the maximum penalty, and the Assessing Officer has exercised its discretion as per the mandate of the Legislature.

7. The Tribunal, thereafter, proceeded to examine the judgments of the Hon’ble Supreme Court in M/s Hindustan Steel vs. State of Orissa; Deputy Commissioner, Central School Organization & another vs. J. Hussain, (2013) 10 SCC 106, as well as the judgments of the Allahabad High Court in M/s Dhampur East Company vs. Commissioner of Commercial Tax, U.P., 2004 (24) NTN 434; M/s Jain Sons vs. Commissioner of Commercial Tax, 2000 (16) NTN Page 139.

8. Relevant portion of Section 58 of the Act is as under:-

“Section 58. Offences 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, direct that 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-

9. In the abovesaid judgments, the Hon’ble Supreme Court and the Allahabad High Court have examined the provisions of imposition of penalty for late deposit of tax with interest, and have held that if penalty is to be imposed it is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. The power should be exercised in reasonable manner and penalty should not be imposed in each and every case when there is a default. Imposition of penalty, mechanically, is highly improper and cannot be approved. When punishment is found to be outrageously disproportionate to the nature of charge, then principle of proportionality comes into play. The question of the choice and quantum of punishment is within the jurisd