Penalty under Section 77 for delayed ST-3 returns: minimum is Rs. 100, while the higher amount applies per day of default.

Section 77 of the Finance Act, 1994 was construed to mean that the defaulting person is liable to a minimum penalty of Rs. 100, while the higher amount of up to Rs. 200 applies for each day the failure continues. The phrase "for every day" was held to qualify only the maximum figure, not the minimum amount. On that reading, the reduction of penalty to Rs. 1,000 in each case was upheld and the Revenue's appeals were rejected.

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Issues: Whether the penalty under Section 77 of the Finance Act, 1994 for delayed filing of ST-3 returns is to be read as a minimum penalty of Rs. 100 per day or as a minimum penalty of Rs. 100 with a maximum of Rs. 200 for every day during which the failure continues.

Analysis: Section 77 provides that a defaulting person shall pay a sum which shall not be less than Rs. 100, but which may extend to Rs. 200 for every day during which the failure continues. The words "for every day" qualify only the maximum figure of Rs. 200 and do not attach to the minimum figure of Rs. 100. On the plain language of the provision, the minimum penalty is Rs. 100 and the higher amount is recoverable per day of continued default.

Conclusion: The Commissioner (Appeals) was correct in reducing the penalty to Rs. 1,000 in each case. The Revenue's appeals were rejected.

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