Penalty under Sections 76 and 78 was cut to the tax determined, with credit for sums already paid.

Penalty under sections 76 and 78 of the Finance Act, 1994 was held excessive where the lower authority effectively imposed twice the tax determined by levying separate penalties under both provisions. The Tribunal noted that the appellants had already paid the tax and part of the penalty, and that the statutory penalty was confined to the amount of tax determined. It therefore reduced the penalty to that amount, granted credit for the sum already deposited, and directed payment of only the balance.

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Issues: Whether the penalties imposed under sections 76 and 78 of the Finance Act, 1994, each equal to the tax determined, were excessive and liable to be reduced.

Analysis: The appellants had already paid the tax determined and part of the penalty. The penalty imposed by the lower authority amounted to twice the tax determined by imposing separate penalties under two provisions. The Tribunal held that the law provided for penalty up to the amount of tax determined and that imposition of twice that amount was not warranted in the facts of the case.

Conclusion: The penalty was reduced to the amount of tax determined, with credit for the amount already deposited, and the balance was directed to be paid by the appellants.

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