KARYA PALAK ENGINEER Vs. COMMISSIONER, COMMERCIAL TAXES

JUDGEMENT

(1.) The Uttarakhand VAT Act, 2005, came into force w.e.f. first day of October 2005, prior thereto the Uttaranchal Trade Tax Act held the fort. Both the Acts obliged every person responsible for making payment to a contractor for discharge of any liability on account of valuable consideration payable for transfer of property in goods in pursuance with work contract to deduct four per cent of such payment at the time to making such payment and to deposit the same with the Government Treasury before the expiry of the month following the date of deduction. This obligation was imposed by Section 8-D of the Uttaranchal Trade Tax Act and by Section 35 of the Uttarakhand VAT Act, 2005. Both the said Acts provided for imposition of penalty not exceeding twice the amount deductible in case there is failure to deduct and in case there is failure to deposit after deduction. Both the Acts, namely Uttaranchal Trade Tax Act as well as the Uttarakhand VAT Act made it obligatory to pay interest, in the event, tax so deducted is deposited beyond the time specified in the Acts. In the instant case, the revisionists in these revision applications, deducted tax and also deposited the same, but beyond the time specified by the Acts, and, accordingly, deposited interest also. The assessing authority finding that tax deducted were deposited beyond the time specified, imposed penalty to the extent of twice the amount of the tax deducted. The appellate authority for some reasons recorded, reduced the penalty to the tune of ten per cent of the deducted tax. The Revenue as well as the revisionists approached the Tribunal. The appeals preferred by the revisionists have been rejected, whereas appeals preferred by the Revenue have been allowed. The Tribunal while allowing the appeals of the Revenue recorded identical finding, one of which is as follows:

(2.) Furthermore, there is no pronouncement as to whether penalty is at all leviable in respect of deduction made, but deposited beyond the time specified. In the circumstances, we interfere with the judgments and orders of the Tribunal under revisions and set aside the same and, remit back the matter to the Tribunal for consideration whether penalty is at all leviable in case where deductions made have been deposited, but belatedly and, if so, whether penalty imposable for such a crime can be equated with the crime of not deducting or with not depositing after deduction; as well as what should be the rational penalty to be imposed for delay in depositing deducted tax with reasons in support thereof.