Allahabad High Court
M/S Frontier Springs Limited ... vs The Commissioner Of Trade Tax U.P. ... on 4 October, 2013
Bench: Arun Tandon
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 10
Case :- SALES/TRADE TAX REVISION No. - 806 of 2007
Applicant :- M/S Frontier Springs Limited Thru' Managing Director
Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal,Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
With
Case :- SALES/TRADE TAX REVISION No. - 807 of 2007
Applicant :- M/S Frontier Springs Limited Thru' Managing Director
Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal,Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
With
Case :- SALES/TRADE TAX REVISION No. - 808 of 2007
Applicant :- M/S Frontier Springs Limited Thru' Managing Director
Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal,Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
With
Case :- SALES/TRADE TAX REVISION No. - 809 of 2007
Applicant :- M/S Frontier Springs Limited Thru' Managing Director
Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal,Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
With
Case :- SALES/TRADE TAX REVISION No. - 911 of 2007
Applicant :- M/S Frontier Springs Ltd. Thru' M.D. Kapil Bhatia
Opposite Party :- The Commissioner Of Trade Tax, U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal,Sri Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
With
Case :- SALES/TRADE TAX REVISION No. - 912 of 2007
Applicant :- M/S Frontier Springs Ltd. Thru' M.D. Kapil Bhatia
Opposite Party :- The Commissioner Of Trade Tax, U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal
Counsel for Opposite Party :- S.C.
Hon'ble Arun Tandon,J.
Heard Sri Shubham Agrawal, learned counsel for the assessee and learned Standing Counsel for the department in these six revisions.
These six trade tax revisions filed by the assessee raise common question of law. Therefore, all these revisions have been clubbed together and are being decided by this common judgement.
Facts in short leading to these six revisions are as follows:
The assessee in assessment years 2000-2001 and 2001-2002 in different quarters had committed default in deposit of admitted amount of tax within the time permissible. Therefore, proceedings for penalty under Section 15A (1) (a) of the Trade Tax Act were initiated against the assessee. The assessing authority found that the explanation furnished by the assessee for non-deposit of the admitted amount of tax within the time permitted under the Statute was not satisfactory and therefore, penalty at the rate of 20% of the amount of of tax was levied.
Not being satisfied, the assessee filed first appeal which was allowed by the first appellate authority vide order dated 6th April, 2002 and it was held that the explanation furnished by the assessee qua delay in deposit of the tax was bona fide and satisfactory and therefore, levy of penalty was set aside.
Feeling aggrieved by the order so passed by the first appellate authority, the department filed six second appeals, which were clubbed together and have been decided under a common judgement dated 10th April, 2007 by the Tribunal. Hence these six revisions.
The Tribunal in the facts of the case has found that the explanation furnished by the assessee qua sale price along with the incident of tax being not recovered from the purchaser, which was none other than a Government Company, namely, Railways, was not reasonable explanation for non-deposit of the tax within the time. Similarly, deposit of admitted amount of tax interest for delayed period by the assessee, will not dilute the levy of penalty. The Tribunal has gone on to hold that the liability to pay the tax on the transactions is admitted to the assessee and it is wholly immaterial as to whether he had recovered the sale price along with the incident of tax from the purchaser or not.
This Court finds no illegality in the reasoning so assigned in the order of the Tribunal. It has to be kept in mind that payment of interest on the delayed amount of tax flows from statutory provision i.e. Section 8(1) of the Trade Tax Act while penalty proceedings are taken for delayed payment of tax under Section 15A (1) (a) of the Trade Tax Act. Both interest and penalty are two different concepts. Interest flows from the retention of the money, which was legally payable, while penalty is inflicted for violation of statutory provisions and the time scheduled prescribed.
In the facts of the case, it is no concern of the department as to whether the purchaser had made payment of price of the goods purchased to the revisionist-assessee dealer or not and it is also immaterial as to whether the purchaser is a Government Company or a private buyer.
In the totality of the circumstances as on record, this Court finds absolutely no illegality in the order passed by the Tribunal.
Learned counsel for the petitioner has placed reliance upon the judgement of this Court in the case of M/s. East Indian Transformers & Switch Gear (P) Ltd., Ghaziabad vs. Commissioner of Sales Tax reported in 1993 U.P.T.C.--212.
The judgement relied upon by the assessee does not lay down any proposition of law as would be clear from paragraph-4 of the said judgement which specifically mentions that in the facts of the case, the Court was satisfied that no penalty was called for.
Learned counsel for the assessee has also referred to the judgement of this Court in the case of M/s. Govind Sugar Mills Ltd., Lakhimpur Khiri vs. Commissioner of Trade Tax reported in 2008 U.P.T.C.--991, only for the purpose that the rate of penalty may be reduced from 20% to the minimum permissible i.e. 10%.
In the facts of the case the amount of penalty is reduced to 15% subject to the conditions that the assessee deposits the reduced penalty in terms of the order of this Court within one month from today. Any amount already deposited shall be taken into consideration for the purpose. In case of default in compliance with any of the conditions mentioned above, the assessee shall not be entitled to the benefits of this order.
The order of the Tribunal stands modified to that extent only.
With the aforesaid directions/observations, all the revisions stand disposed of.
(Arun Tandon, J.)
Order Date :- 4.10.2013
Sushil/-
Case :- SALES/TRADE TAX REVISION No. - 806 of 2007
Applicant :- M/S Frontier Springs Limited Thru' Managing Director
Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow
Counsel for Applicant :- Shubham Agrawal, Bharat Ji Agarwal
Counsel for Opposite Party :- S.C.
Hon'ble Arun Tandon,J.
Disposed of.
For order, see order of date passed on the separate sheets.
(Arun Tandon, J.)
Order Date :- 4.10.2013
Sushil/-
