COMMISSIONER COMMERCIAL TAX Vs. BAREILLY HIGHWAYS PROJECTS LIMITED

JUDGEMENT

(1.) This revision is by the revenue challenging an order passed by the Tribunal dated 29th March, 2016, setting aside the order of the First Appellate Authority dated 8th March, 2013, and thereby quashing the penalty imposed upon the assessee for late deposit of tax under Section 34 (8) of the U.P. Value Added Tax Act.

(2.) In order to appreciate the controversy involved, it would be relevant to notice provisions of the U.P. VAT Act, which operates in the field. Section 34 provides for tax deduction at source, Sub-section (1) thereof deals with deduction of tax at source, while Sub-section (6) provides the time within which such amount is to be deposited, and for any failure to deposit such amount, liability of interest arises under sub-section (9), whereas, for any failure to deposit tax deducted at source, penalty is leviable under sub-section (8). The provisions in that regard are reproduced:-

(3.) In the facts of the present case, the assessee for the year 2011-2012 made payment to its sub contractor, and also deducted tax at source amounting to Rs. 58,10,052/-. The amount was deducted in December, 2011, and by virtue of sub-section 6, was liable to have been deposited by 20th January, 2012. Instead, such deposit was made on 1.6.2012. It has come on record that upon the delayed deposit of tax, interest payable under Sub-section (9) has been duly deposited by the assessee. The authorities under the act also imposed penalty to the extent of twice the amount of delayed deposit of tax. Such imposition of penalty, however, has been set aside by the Tribunal, noticing the fact that revenue was not adversely affected since interest upon such delayed amount has been deposited. Para 8 and 9 of the Tribunal's order which notices reasons for quashing penalty, reads as under:-