Cheque tender for admitted tax treated as deposit date; penalty for delayed deposit could not stand.

Tender of a cheque for admitted sales tax to the assessing authority within time was treated as deposit on the date of handing over the cheque under rule 49 of the U.P. Sales Tax Rules, 1948, where the cheque was not dishonoured or returned for insufficiency of funds and the delay in encashment was not attributable to the assessee. On that basis, the factual foundation for default was absent, so penalty under section 15-A(1)(qq) of the U.P. Sales Tax Act, 1948 could not be sustained. The orders of the assessing authority and the Tribunal were quashed.

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Issues: Whether submission of a cheque towards admitted sales tax amounted to deposit on the date of handing over the cheque under rule 49 of the U.P. Sales Tax Rules, 1948, and whether penalty under section 15-A(1)(qq) of the U.P. Sales Tax Act, 1948 was sustainable.

Analysis: The admitted tax was tendered by cheque to the assessing authority within time, and the subsequent delay in encashment was not attributable to the assessee. The cheque was neither dishonoured nor returned with any endorsement of insufficiency of funds. In these circumstances, the date of submission of the cheque had to be treated as the date of deposit under rule 49, and the factual basis for holding default and imposing penalty was absent.

Conclusion: Penalty under section 15-A(1)(qq) was not sustainable, and the orders of the assessing authority and the Tribunal were liable to be quashed.

Ratio Decidendi: Where an assessee tenders a cheque for admitted tax to the assessing authority and the cheque is not dishonoured, the date of tendering the cheque is treated as the date of deposit for the purpose of compliance, and penalty for delayed deposit cannot be imposed without material evidence of default.

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