1980 (1) TMI 109

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....or interest on delayed payment if sales-tax by an order under s. 154 of the IT Act. 2. The original assessments in these cases for these two years were made on 29th March, 1974 and 13th March, 1975 without disallowing interest amounts of Rs. 5,119 and Rs. 5,862 debited to the accounts of the respective years for interest on delayed sales tax payment. Thereafter, the ITO passed orders under s. 1....

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....merits that retention and utilisation of monies meant to be paid in Government treasury was a clear infringement of law and any sanction visited for such unauthorised retention and utilisation of the Government funds could not be termed just as a civil liability. He held that the amounts paid by the assessee, namely Rs. 5,119 and Rs. 5,862, were in the nature of penalties for infringement of law a....

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....bility. Any amount spent in respect of the discharge of such a liability would qualify for deduction. As against this, it is brought to our notice that the assessee's case for the asst. yr. 1972-73 in the IT Appeal No. 372 (Ahd)/77-78 was decided by the Tribunal by their order dt. 29th Nov., 1978 wherein the ld. Members of the Tribunal held that the imposition of the penalty by the State on a deal....

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....of Maharashtra(3), it is held that whatever may be the object of levying penalty under the ST Act for delayed payment of sales-tax, its imposition gave rise to a substantive liability which could be viewed either as an additional tax or as a fine for the infraction of law. It is thus stated that the law on the subject was clear as laid down by the Final Court of Land and there were no two opinions....