Penalty for non-filing of return was impermissible where the statute did not expressly cover that default.

Penalty under section 10 of the Uttar Pradesh Taxation and Land Revenue Laws Act, 1975 could not be imposed merely because a luxury tax return was not filed on time, since that provision covered non-payment of sums payable and specified information defaults, not non-filing of the return itself; the proper course was best-judgment assessment under the rules. The impugned demand notices and orders were also unsustainable because they did not clearly state whether the amount sought was tax, penalty or fine, or identify the legal basis of the demand. They were quashed and the matter remitted for fresh adjudication after hearing the assessee.

---

---

Issues: (i) Whether penalty under section 10 of the Uttar Pradesh Taxation and Land Revenue Laws Act, 1975 could be levied merely for failure to file the return under the luxury tax rules; (ii) Whether the impugned notices/orders were liable to be quashed and the matter remitted for fresh decision in accordance with law.

Issue (i): Whether penalty under section 10 of the Uttar Pradesh Taxation and Land Revenue Laws Act, 1975 could be levied merely for failure to file the return under the luxury tax rules.

Analysis: Section 10 provided penalty only for failure to pay any sum payable under section 5 or section 7, and for failure to supply information required under the rules or for knowingly supplying false information. Failure to file a return was not itself made punishable under that provision. Where a return was not filed within time, the proper course under the rules was assessment to the best of judgment under rule 6(5), not imposition of penalty merely on that ground.

Conclusion: Penalty could not be levied under section 10 solely for non-filing of the return.

Issue (ii): Whether the impugned notices/orders were liable to be quashed and the matter remitted for fresh decision in accordance with law.

Analysis: The notices and orders did not clearly specify whether the sum of Rs. 5,000 was demanded as tax, penalty, or fine, and did not identify the legal basis for the demand. In these circumstances, the appropriate course was to set aside the impugned notices/orders and require the assessing authority to pass fresh orders after hearing the assessee and after determining the correct legal position, including the effect of any advance deposit already made.

Conclusion: The impugned notices/orders were quashed and the matter was remitted for fresh adjudication.

Final Conclusion: The assessee succeeded in challenging the legality of the impugned demand, and the assessing authority was required to reconsider the matter afresh in accordance with law after hearing the assessee.

Ratio Decidendi: Penalty can be imposed only for conduct expressly covered by the charging penalty provision, and where a demand is ambiguous as to its legal character, the proper remedy is to set it aside and direct fresh adjudication in accordance with law.

---