JUDGMENT Anshuman Singh, J.
1. These two revisions are directed at the instance of the Commissioner of Sales Tax, Lucknow, against the judgment dated 19th June, 1985, passed by the Sales Tax Tribunal, Ghaziabad, relating to assessment year 1974-75 (two parts). Since both the revisions arise out of a common order, they are being disposed of by a common judgment.
2. The Assistant Commissioner (Assessment) issued notice under Section 15-A(1)(a) of the U. P. Sales Tax Act (hereinafter referred to as the Act) to the respondent-assessee for not depositing the admitted tax for the quarters ending September and December, 1974, within the time prescribed by law. In reply to the said notice the respondent-assessee contended that it had no intention to evade the tax or not to deposit the admitted tax intentionally but since it was not in a position to deposit the admitted tax because of the financial condition and as such no penalty should be imposed. The explanation offered by the assessee was not accepted by the assessing authority and the penalty was imposed. The respondent-assessee preferred appeals against the said imposition of penalty and the amount of penalty was reduced by the first appellate court. The Revenue as well as the assessee feeling aggrieved against the order of the first appellate authority filed appeals and the appeals of the assessee were allowed and that of the Revenue were dismissed.
3. I have heard learned Standing Counsel for the department and the counsel for the respondent-assessee. The Standing Counsel strenuously urged that the financial tightness or difficulty cannot absolve a dealer of the liability of imposition of penalty. He contended that once the dealer collected tax from its customer and if he did not deposit the same within the time, it could not raise the plea of financial tightness in penalty proceedings. In support of his contention he placed reliance on a decision of this Court in Juggilal Kamlapat Cotton Spg, & Wvg. Mills Company Limited v. Commissioner of Sales Tax 1978 UPTC 704. In that case it was found that the tax realised by the assessee from its customers had been diverted to another sister concern M/s. J. K. Rayon Factory. Since the assessee had realised the tax from its customers which instead of depositing the same was utilising the said money in sister concern and ultimately earning profit, the plea raised regarding financial difficulty was not held to be adequate ground for remission of penalty. In the instant cases the Tribunal has considered the explanation offered by the assessee in detail and has recorded a categorical finding that the assessee was under financial strain and because of that it could not deposit the admitted tax for the periods in question within the prescribed time. A further finding was recorded that there was nothing on record to indicate that the assessee had any mala fide intention. Even the assessing authority and the Assistant Commissioner (Judicial) also did not hold that the assessee acted mala fide in not depositing the admitted tax. The assessee in support of the claim of tight financial position produced various documentary evidence, letters sent from time to time to the sales tax authorities informing about the depression in business stock, realisation of dues from its various customers and pressure of other creditors. Not only this the assessee also gave details of its production and sales in the relevant periods as well as in earlier months and after perusal of the said records it was clearly evident that there has been decline in the sales of the assessee. The assessee successfully established that there was a slump in the market. Bank credit of the assessee had also gone down and the bank was also threatening to adopt coercive measures against the assessee. In view of the accumulative facts and circumstances of the cases indicated above that the Tribunal reached to the conclusion that the assessee was in a tight financial position and imposition of penalty was not justified. In this view of the matter the case of Juggilal Kamlapat Cotton Mills' case 1978 UPTC 704 is distinguishable.
4. Counsel for the assessee has also invited my attention to a decision of this Court in Khandelwal Glass Works v. Commissioner of Sales Tax 1985 UPTC 281 in which it was held that non-deposit of the admitted tax by itself may not be a sufficient circumstance for imposing penalty and the other circumstances which resulted in non-deposit of the admitted tax should also be taken into account and on the basis of the said decision counsel for the assessee urged that in the instant cases the Tribunal has taken into account the circumstances and arrived at a positive conclusion that the assessee was in a tight financial position and as such it could not deposit the admitted tax within time. In view of the aforesaid facts I am of the opinion that the order passed by the Tribunal does not suffer from any error of law and is liable to be sustained.
5. In the result the revisions fail and accordingly dismissed. However, there will be no order as to costs.