Cheque payment date relates back on presentation; minor delay in tax deposit did not justify penalty.

Penalty for delayed filing and tax deposit was held unwarranted where the assessee tendered payment by cheque within time and the cheque was later honoured. Rule 48 treated cheque payment as valid, and the date of payment related back to the date of presentation of the cheque, so the Tribunal erred in treating encashment as the payment date. The court also held that the delay, even on the corrected basis, was only marginal and amounted to a trivial default. Because section 15-A(1)(a) is discretionary and requires absence of reasonable cause, the penalty could not be imposed mechanically for such a minor lapse.

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Issues: Whether penalty was liable to be imposed for delayed filing and deposit of tax where the assessee tendered payment by cheque, the cheque was encashed later, and the delay was only of a few days.

Analysis: Section 15-A(1)(a) of the U.P. Sales Tax Act, 1948 penalises failure to furnish the return or deposit tax within time without reasonable cause. Rule 48 of the U.P. Sales Tax Rules recognises payment by cheque as a valid mode of payment, and the date of payment in such cases relates back to the date on which the cheque is presented, provided it is honoured. On the facts, the cheque was endorsed and presented within the relevant period, and the Tribunal's view that payment was made only on the date of encashment was legally incorrect. Even after treating the date of presentation as the date of payment, the delay was only marginal and, in the circumstances, amounted to a trivial default. The penalty provision is discretionary and should not be applied mechanically for such a minor lapse.

Conclusion: Penalty under section 15-A(1)(a) was not warranted, and the assessee succeeded.

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