Penalty for non-remittance of collected tax upheld despite notice citing the wrong sub-section

Where tax collected from customers was not remitted to the State with the returns, the statutory consequence under Section 73(11) followed on the admitted facts, rather than Section 73(8). The omission in the show cause notice to refer expressly to Section 73(11) did not vitiate the penalty because the factual basis for that provision was undisputed and no prejudice was shown. The penalty was therefore upheld and the natural justice challenge failed.

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Issues: Whether the penalty was rightly imposed under Section 73(11) despite the show cause notice referring to a different sub-section and whether there was any violation of natural justice.

Analysis: The taxable amounts had been collected from customers and were not remitted to the State along with the returns. On the admitted facts, the statutory consequence flowed from non-payment of tax collected from customers, which attracted Section 73(11) and not Section 73(8). The omission in the show cause notice to specifically mention Section 73(11) did not cause prejudice because the factual basis for invoking that provision was undisputed.

Conclusion: The penalty under Section 73(11) was validly imposed and the challenge based on the wording of the notice failed.

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