TMI Blog2018 (12) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... - Saumitra Dayal Singh,J. For the Applicant : Suyash Agarwal For the Opposite Party : C.S.C. ORDER SAUMITRA DAYAL SINGH,J. 1. All revisions arise from a common order of the Commercial Tax Tribunal, Agra Bench-II, Agra dated 05.10.2018, by which, that Tribunal has dismissed twelve second appeals filed by the present applicant against twelve penalty orders passed under Section 34(8) of the U.P. VAT Act, 2008 (hereinafter referred to as the Act), for the period April, 2009 to March, 2010. The penalties had been imposed on the applicant-asseessee occasioned by alleged delay in deposit of TDS amount by the applicant-assessee, on payments made to certain contractors during the aforesaid period April, 2009 to March, 2010. 2. It is also admitted fact that penalty notice were issued to all applicant-assessee on 20.01.2015. Much prior to that, the assessee had, of its own, deposited the entire defaulted amount of TDS together with interest. Thus, the default together with interest had been cleared by the applicant-assessee before the same came to the notice of the assessing authority. The facts pertaining to imposition of penalty giving rise to the present set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared the default much before the same came to be noticed by the assessing authority, the loss caused to the revenue together with interest stood compensated by the assessee's self conduct. Therefore, in such facts, it could never be said that the penalty was not paid. 5. Reliance has also been placed on a decision of this Court in the case of M/S Yadu Sugar Mill Ltd. Vs. The Commissioner Commercial Taxes passed in Sales/Trade Tax Revision No.311 of 2018 decided on 12.11.2018. 6. In view of the submissions advanced, the following questions of law do appear to arise: (i) Whether penalty under Section 34(8) of the U.P. Vat Act, 2008 (hereinafter referred to as the Act) is mandatory ? (ii) Whether justification to impose penalty survived when the assessee had, of its own and prior to issuance of any notice in that regard, cleared the default in payment of T.D.S. amount together with interest ? 7. Having heard learned Senior Counsel appearing for the applicant-assessee and Sri B.K. Pandey, learned counsel for the opposite party-revenue, the present revisions are being heard and decided at the fresh stage itself, with consent of parties. 8. The facts bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C-400), this Court upheld the deletion of similar penalties. 11. Thus, at first there appears to exist a difference of opinion in the judgments cited by the learned counsel for the applicantassessee and learned Standing Counsel to the extent the decisions of C.C.T. Vs Rajendra Kumar Gupta Memorial Trust and M/s Shell India Markets Pvt. Ltd. Vs. C.C.T and other judgments noted above, appear to hold once the assessee had cleared the default of tax together with interest, no prejudice may be claimed by the revenue as may justify imposition of penalty, while in the case of C.C.T. Vs. Bareilly Highways Projects Limited (supra), another learned Single Judge held deposit of tax made belatedly along with interest may not be a lead to penalty under Section 34(8) of the Act being dropped. That conclusion was reached largely in absence of any earlier decision on the point being placed before the Court. Though the element of concealment was rightly held to be irrelevant, yet, that does not form any part of the reasoning in the two earlier judgments relied upon by learned counsel for the assessee. 12. Though it is true 'concealment' is not an ingredient of penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndeed, the decisions in this context dwell predominantly on the scope of interpreting shall as merely obligatory, whereas the nodus in hand is the obverse. G.P. Singh in his treatise titled, Principles of Statutory Interpretation remains steadfast in the opinion that when both words are used in the same section, shall imposes an obligation or imperative whilst may connotes directive or discretionary power................ . 14. It is difficult to read the word 'may' first used in section 34(8) of the Act to signify a mandatory action by the assessing officer, though the plain grammatical meaning of the word 'may' suggests otherwise as to existence of a discretion or an option to do or to not do a certain thing. If the legislature intended to provide a mandatory penalty upon each and every default, then, it would have used the word shall in the first part of that sub-section also. The legislature having used both may and shall in the same sub-section in the context of the same penalty, it would be doing violence to the language used by the legislature to not recognize and give full effect to the difference in the plain grammatical meaning of the two w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all other attending facts and circumstances obliged to impose penalty. To accept such an interpretation, besides doing violence to the plain language of the sub-section would otherwise discourage a bona fide assessee from rectifying his own default, especially in cases where the revenue may not be even aware of the default or its cure on self-act of the assessee as in the instant case. 19. Thus on the question of interpretation, the imposition of penalty under section 34(8) of the Act as also quantification of the penalty amount (where that penalty may be found imposable), is found to be directory and not mandatory. Only the enforcement of the penalty order is found to be mandatory. The judgment of this court in the case of C.C.T. Vs. Bareilly Highways Projects Limited (supra) does not interpret the penalty under section 34(8) of the Act as mandatory. It cannot be read to that effect. 20. Even as to applicability of that judgment, it is wholly distinguishable. First, it only holds, in determining the penalty, it may be relevant but not itself sufficient to drop the penalty if the assessee had cleared the default together with interest. It did not hold that in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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