Bona fide delay in tax deposit with interest does not justify penalty when no revenue loss is shown.

Penalty for delayed tax deposit under the U.P. VAT Act was held unsustainable where the assessee had arranged the tax amount in time, the actual deposit was delayed during transit, and the tax was paid with interest for the delayed period. Because the delay was bona fide, not deliberate or contumacious, and no loss to the revenue was shown, penalty could not be justified merely on the basis of a short delay. The penalty order was quashed and any penalty already deposited was directed to be refunded.

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Issues: Whether penalty for delayed deposit of tax under the U.P. VAT Act was sustainable where the tax was deposited along with interest and the delay was bonafide and caused no loss to the revenue.

Analysis: The revisionist had arranged the tax amount within time and the delay in actual deposit was attributed to transit between Mumbai and Agra. The tax was deposited with interest for the delayed period and there was no material to show any loss suffered by the department. In such circumstances, penalty could not be justified merely on the basis of a short delay, especially when the delay was not shown to be deliberate or contumacious.

Conclusion: The penalty was unsustainable and was rightly set aside in favour of the assessee.

Final Conclusion: The revision succeeded, the penalty order was quashed, and the amount of penalty, if deposited, was directed to be refunded.

Ratio Decidendi: Where tax is deposited belatedly along with interest and the delay is shown to be bonafide without any loss to the revenue, penalty for delayed payment is not justified.

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