Procedural lapse in filing RT 12 returns did not justify penalty where no duty demand or evasion was shown

Failure to file RT 12 returns was treated as a procedural lapse where no duty demand had been raised, no evasion was alleged, and the units were otherwise eligible for exemption on filing the required declaration. On those facts, the omission was viewed with leniency rather than as conduct warranting penalty, and the penalties were set aside.

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Issues: Whether the penalties imposed for failure to file RT 12 returns were sustainable when no duty had been demanded, no evasion was alleged, and the units were otherwise eligible for exemption.

Analysis: The appellants had not filed the RT 12 returns for the relevant period, but the record showed that no duty demand had been raised and no allegation of evasion was made. The units were stated to be eligible for exemption upon filing the requisite declaration. In these circumstances, the omission to file RT 12 returns was treated as a procedural breach that could be viewed with leniency rather than visited with penalty.

Conclusion: The penalties were set aside in favour of the appellants.

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