Penalty for delayed VAT payment was held unsustainable where admitted tax and interest were paid and no revenue loss arose.

Penalty for delayed deposit of admitted VAT was held unjustified where the tax and interest for the period of delay had already been paid. The Tribunal's view was accepted that section 58(1)(vii) penalty could not be sustained because the belated payment caused no financial loss to the revenue and the default was confined to delay in remittance. The High Court also noted that the same reasoning had been applied in earlier connected revisions, and the question was answered in favour of the assessee and against the revenue.

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Issues: Whether penalty was sustainable for delayed deposit of admitted tax under the VAT regime.

Analysis: The respondent had deposited the tax along with interest for the period of delay. The Tribunal found that, in these circumstances, imposition of penalty under section 58(1)(vii) was unjustified. The High Court accepted that view, noting that the delayed payment had not caused any financial loss to the revenue and that the penalty was only for belated payment. The Court also observed that the same reasoning had already been applied in connected revisions decided earlier.

Conclusion: The penalty was not sustainable and the question was answered against the revenue and in favour of the assessee.

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