Penalty for delayed tax payment held unsustainable where admitted tax and interest were paid before penalty proceedings.

Penalty under section 15A(1)(a) of the U. P. Trade Tax Act was treated as unjustified where the assessee paid the admitted tax, later deposited the balance with interest, and the delay was short. The Court followed its earlier view that, once tax and interest for the delayed period are paid before penalty proceedings are warranted, further penal action is not called for. On that basis, the penalty confirmed by the Tribunal was held unsustainable.

---

---

Issues: Whether penalty under section 15A(1)(a) of the U. P. Trade Tax Act was sustainable where the assessee deposited the admitted tax along with interest for the period of delay after a short delay.

Analysis: The admitted tax for the relevant month was paid in instalments within a short period of delay, and the balance was ultimately deposited along with interest. The revisionist's explanation was financial crunch. The Court followed its earlier view that when the assessee has paid the tax and interest for the delayed period before penalty proceedings are justified, the imposition of further penalty is not warranted. On that footing, the penalty confirmed by the Tribunal could not be sustained.

Conclusion: The penalty under section 15A(1)(a) was held unsustainable and the revisionist succeeded.

---