Timely cheque deposit protects against interest and penalty when credit to the Government account is delayed without assessee fault.

Where an assessee deposited cheques on the appointed date, interest and penalty were not leviable merely because the amount was credited to the Government account later, provided the delay was not attributable to the assessee. The Tribunal applied the relevant Trade Notice, which treated timely deposit as sufficient and carved out liability only where the assessee was at fault for the delay in credit. On that basis, the assessee was relieved from interest and penalty.

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Issues: Whether interest and penalties were leviable where the assessee deposited cheques on the appointed date but the amount was credited to the Government account later.

Analysis: The payment was made by depositing cheques within time and the delay in credit to the Government account was not attributable to any fault of the assessee. The Tribunal relied on the applicable Trade Notice, which stated that when deposit is made on the appointed date, interest and penalty should not be imposed merely because the credit reaches the Government account later, except where the delay is due to the assessee's fault.

Conclusion: Interest and penalties were not leviable, and the appeal succeeded.

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