Technical default without revenue loss does not justify penalty where tax is later paid with interest.

Penalty under section 8-D(6) of the U.P. Trade Tax Act was held unsustainable where tax deducted at source was deposited later with interest, the revenue suffered no loss, and no mala fide intention was shown. The Court applied the principle that a technical default causing no prejudice to the revenue does not justify penalty, and upheld the Tribunal's cancellation of the levy in favour of the assessee.

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Issues: Whether penalty under section 8-D(6) of the U.P. Trade Tax Act, 1948 was justified where the tax deducted at source was deposited later along with interest and there was no revenue loss.

Analysis: The delayed deduction of tax at source for the relevant months was admitted, but the tax was ultimately deposited along with interest. In such circumstances, the revenue suffered no loss. The absence of any mala fide intention on the part of the assessee was also noted. Applying the principle that penalty is not warranted where the default is technical and does not result in prejudice to the revenue, the penalty could not be sustained.

Conclusion: The penalty under section 8-D(6) was not justified and its cancellation by the Tribunal was upheld in favour of the assessee.

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