AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 610
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....t of tax has been affirmed. Section 54(1)(1) is relevant and is reproduced hereinafter:- "54. Penalties in certain cases- (1) The assessing authority, if he is satisfied that any dealer or other person, as the case may, has committed the wrong described in column 2 of the table below, it may, after such inquiry, if any, as it may deem necessary and after giving dealer or person reasonable opportunity of being heard, direct that such dealer or person shall, in addition to the tax, if any, payable by him, pay by way of penalty, a sum as provided in column 3 against the same serial no. of the said table: c Wrong Amount of Penalty (1) (2) (3) 1 The dealer has without reasonable cause failed,­ 20 % of tax payable rupees....
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....t. The factual plea setup by the assessee that in its bank account it had no liquid funds, however, is not disputed. 4. The assessee places reliance upon a decision of this Court in M/s Govind Sugar Mills Limited vs. Commissioner of Trade Tax reported in 2008 UPTC 991, in which the provisions of the U.P. Trade Tax Act, similar in nature, fell for consideration. This Court after examining the law on the point proceeded to hold as under in para 13 and 19:- "13. In Commercial Auto Sales Pvt. Limited, Allahabad v. Commissioner of Trade Tax, U.P., Lucknow, 2000 NTN (Vol. 17) 714, the Court held: "As is evident, there was only trifling delay of 9 days and 15 days in the payment of tax and the dealer voluntarily without any action on the par....
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....e exercised judicially and on a consideration of all the relevant circumstances." 19. In view of the consistent pronouncement of various judgments on this issue by the Court, this Court is of the opinion that the imposition of penalty under Section 15-A(1)(a) of the Act was patently erroneous especially where the tax along with interest had been deposited and reasonable cause had been shown for the delay which has not been disputed by the department." 5. Learned counsel for the revisionist contends that a reasonable cause had been placed on record before the authorities for the delay of two days caused in depositing tax and the tribunal was not justified in levying penalty to the extent of 20% of the tax payable. 6. Learned Standing C....
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....view, penalty under Section 10(3) of the Act is compensatory. It is levied for breach of a statutory duty for non-payment of tax under the Act. Section 10(3) is enacted to protect public revenue. It is enacted as a deterrent for tax evasion. If the statutory dues of the State are paid, there is no question of imposition of heavy penalty. Everything which is incidental to the main purpose of a power is contained within the power itself. The power to impose penalty is for the purpose of vindicating the main power which is conferred by the statute in question. Deterrence is the main theme or object behind the imposition of penalty under Section 10(3)." 7. Reliance is also placed upon another decision of the Apex Court in Chairman SEBI vs. Sh....
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....own the provision as being violative of Article 14 and 19(1)(g) of the Constitution. It was in that context that the Apex Court observed that penalty can also be compensatory in nature and that the provision itself could not be struck down. This judgment has no applicability in the facts and circumstances of the present case. 11. So far as the judgment in Chairman, SEBI (supra) is concerned, their Lordships of the Apex Court observed that where penalty proceedings are initiated under the Act there is no question of proof of intention or any requirement of mense rea. In the context of the provision of section 15 of the Security and Exchange Board of the India Act, 1992 it was observed that once penalty became leviable, the plea of har....