PLA credit follows cheque tender date when the cheque is encashed and not dishonoured; penalty was set aside.

PLA credit was available from the date the cheque was tendered to the Government banker, because the cheque was later encashed and was never dishonoured. Applying the governing payment rules, tender of a cheque operated as payment on the date of delivery, so the date of presentation of the cheque was treated as the relevant date for taking credit. The penalty order was set aside.

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Issues: Whether credit in PLA could be taken from the date the cheque was handed over to the banker, where the cheque was later encashed and not dishonoured.

Analysis: The relevant payment date was held to be the date of tender of the cheque, because the cheque was subsequently realised and there was no dishonour. The reasoning proceeded on the basis that, under the governing account and payment rules, tender of cheque operates as payment on the date of delivery to the Government banker.

Conclusion: The date of presentation of the cheque was the relevant date for taking credit, and the penalty order was set aside.

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