SAHARA INDIA AIRLINES Vs. UNION OF INDIA

JUDGEMENT

(1.) . The petitioner company is a scheduled airlines operating its flights on various domestic sectors within the country. Chapter V of the Finance Act, 1989 provides for levy of tax on all passengers embarking on inland journey by air, called the Inland Air Traffic Tax ( IATT for short) The said tax is to be collected by the airlines from the passengers and paid to the credit of the Central Government. Section 46 of the Act provides for the imposition of penalty on carrier or other person who fails to pay IATT to the credit of the Central Govt. The Central Govt has in exercise of the powers conferred by the Act, framed the IATT Rules, 1989 ( hereinafter, the Rules, for short). The Rules provide for depositing with the Central Govt by the carrier the amount of tax collected by it within 30 days from the last date of the previous month.

(2.) For the month of January, 1995, the amount of tax collected by the petitioners and payable to the credit of the Central Govt was to the tune of Rs. 80,32,990.00 . This amount should have been deposited on or before 2.3.1995. However, the amount was deposited in two instalments. An amount of Rs. 50,000.00 was deposited by means of a cheque dated 20.4.95 (realised on 26.4.1995). An amount of Rs. 30,32,990.00 was deposited by means of a cheque dt 10-7-1995 (realised on 12-7-95). An amount of Rs. 3,65,650.00 by way of interest for the period of delay in making the deposit was paid to the credit of the Central Government on 25.9.1995.

(3.) Sub-section (3) of Section 46, around which centres the controversy, reads as under : 46. Penalties xxxx xxxx xxxx (3). Every Carrier or other person who fails to pay the Inland Air Travel Tax to the credit of the Central Government under Sub-section (2) of Section 42 shall, in addition to the payment of such Tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the Tax not so paid to the credit of the Central Government." [emphasis supplied]