R.C. Lahoti, J.@mdashThe petitioner company is a scheduled airlines operating its flights on various domestic sectors within the country. Chapter V of the Finance Act, 1989 provides for levy of tax on all passengers embarking on inland journey by air, called the Inland Air Traffic Tax (IATT for short). The said tax is to be collected by the airlines from the passengers and paid to the credit of the Central Government. Section 46 of the Act provides for the imposition of penalty on carrier or other person who fails to pay IATT to the credit of the Central Govt. The Central Govt. has in exercise of the powers conferred by the Act, framed the IATT Rules, 1989 (hereinafter, the Rules, for short). The Rules provide for depositing with the Central Govt. by the carrier the amount of tax collected by it within 30 days from the last date of the previous month.
2. For the month of January, 1995, the amount of tax collected by the petitioners and payable to the credit of the Central Govt.. was to the tune of Rs. 80,32,990/-. This amount should have been deposited on or before 2.3.1995. However, the amount was deposited in two installments. An amount of Rs. 50,000/- was deposited by means of a cheque dated 20.4.95 (realised on 26.4.1995). An amount of Rs. 30,32,990/- was deposited by means of a cheque dt 10-7-1995 (realised on 12-7-95). An amount of Rs. 3,65,650/- by way of interest for the period of delay in making the deposit was paid to the credit of the Central Government on 25.9.1995.
3. Sub-section (3) of Section 46, around which centres the controversy, reads as under:
46. Penalties
xxxx xx xxxx
(3). Every Carrier or other person who fails to pay the Inland Air Travel Tax to the credit of the Central Government under Sub- section (2) of Section 42 shall, in addition to the payment of such Tax and the interest livable thereon, be liable to pay penalty which shall not be less than one- fifth but which may extend to three times of the amount of the Tax not so paid to the credit of the Central Government."
4. Here itself we may reproduce Rule 6 of the Indian Air Travel Tax Rules, 1989:
"6. Tax to be paid into the Treasury :- The lax collected in any month by any carrier shall be paid by such carrier before the expiry of sixty days from the end of that month into the treasury:
Provided that the Collector of Customs may on sufficient cause being shown and Hhaving regard to the system of accounting adopted by any carrier allow such carrier to pay the tax within a further period not exceeding ninety days."
5. On 28.3.1995, the petitioners were served with a notice, (Annexure-C) to show cause why penalty be not imposed for non-deposit of tax for the month of January, 1995. The petitioners pointed out that they were operating their flights from ten stations within the country. They were following a centralised accounting procedure regarding the deposit of tax in the treasury through its headquarters at Delhi. The documents sent from one of the ten stations for the month January, 1995 were lost in transit and that is why there was a delay in making the deposit. It was prayed that the petitioners be permitted to file return for the month of January since they were in a position to re-construct a duplicate set of documents lost in transit and a lenient view be taken for the lapse of the petitioners which was attributable to the circumstances beyond the control of the petitioners.
6. On 29th June, 1995, the petitioners were informed by the Assistant Commissioner of Customs IATT (vide letter, Annexure-G) as under:
"Sub: Outstanding dues of IATT-JAN 95
Pl. refer your letter dt 25 April, 95 and subsequent assurance of Sh S.K. Trehan, who appeared for personal hearing on 18/5/95 and assured to deposit the pending amounts.
For the month of Jan 95 you did not file the Returns in Part A and B required to be filed under IATT Rules ( as amended). You deposited Rs. 50 lakhs on the average basis.
You are directed to file the required return within seven days of the receipt of this letter and deposit the rest of the amount within this period, failing which action under IATT Rules, 1989 (as amended) will be initiated against you, without any further notice on this subject."
7. The above said letter has been reproduced in its entirety inasmuch as one of the arguments advanced on behalf of the petitioners was based on the contents of the above said letter.
8. After affording an opportunity of hearing the ACC ( IATT) vide his order dated 22.8.1995 (Annexure-L) held, that there was a delay of 137 days in submitting the return for the month of January, 1995 as the same was submitted on 17.7.1995 while it was due on 2.3.1995; the delay in depositing the amount of tax was also not satisfactorily explained; and hence a penalty of Rs. 18 lakhs u/s 46(3) of the Act for contravention of clause 42(2) of the Act read with Rule 6 of IATT Rules was imposed on the petitioner. A penalty of Rs. 2 lakhs under Rule 8A for contravention of Rule 7, a further penalty of Rs. 68,500/- under Rule 8A for delay in sub-mission of IATT returns were also imposed over and above raising a demand on account of interest to the tune of Rs. 3,65,650/- u/s 43A(1) of the Act. However, these are not under challenge. As already noticed the dispute in the present petition relates to imposition of penalty of Rs. 18 lakhs only.
9. The petitioners went in appeal to the Commissioner of Customs ( Appeals). The appeal was allowed. The penalty of Rs. 18 lakhs was set aside and penalty of Rs.68,500/ under rule 8A was reduced to Rs. 10,000/- only. During the course of the order dated 31.1.1996/1.12.96 (Annexure-O), the learned Commissioner observed that the petitioners were regularly depositing the amount of tax and the delay in deposit in the month of January, 1995, appears to be an aberration rather than a rule and hence a case for imposition of penalty was not made out at all. During the course of hearing the learned counsel for the petitioners had relied on the law laid down by the Supreme Court in the case of M/S Hindustan Steels Ltd Vs. State of Orissa, AIR 1990 S.C. 253 which was followed by the learned commissioner.
10. The Commissioner of Customs filed a revision before the Govt. of India which has been allowed vide order dated 31.3.1997, (Annexure-P). The Central Government has held that the delay in depositing the amount of tax cannot be held to be bonafide but appears to be deliberate for at least three reasons: firstly, the petitioners were well aware of their liability to deposit the IATT collected by them in time; secondly, the petitioners had not bothered to inform the department well in time about the loss of documents in transit; and thirdly, the petitioners did not voluntarily deposit the amount of tax on 26.4.1995 itself on ad hoc basis but did so only on the receipt of the show cause notice dated 28.3.1995 which had appointed the date 18.4.1995 for personal hearing on which date an adjournment was taken for 21.4.1995. The Central Govt. has also distinguished the case of M/S Hindustan Steels Ltd (supra), as also the cases of Cement Marketing Co Vs. Asstt Commissioner Sales Tax; (1980) ELT 295 ,
11. Mr Rajiv Nayyar, learned Senior advocate for the petitioners has raised three contentions: (i) firstly, that the jurisdiction to impose penalty arises only when one "fails to pay" the tax which expression implies a deliberate or willful delay in payment of tax which there was none on the part of the petitioners; secondly, that assuming the jurisdiction to impose the penalty was attracted it is not obligatory to impose a penalty though the law provides for a minimum of penalty to be imposed and the adjudicating authority is not debarred from imposing ''no penalty'' or a penalty less than the minimum'' if it be satisfied of the availability of circumstances war ranting such exercise which the assistant Collector of Customs and the Central Govt. have both failed to do; and lastly, The Assistant Collector of Customs having himself (vide his letter dated 29.6.95 Annexure-G ) noticed the factum of part payment of Rs. 50 lakhs by the petitioner, allowed seven days time from the date of receipt of the letter for filing the return and depositing the balance amount within this much period the time for filing the return and making the balance deposit stood extended up to 13.7.95 ( letter having been received by the petitioner on 6.7.95 ) and inasmuch as the return was filed and the balance amount of tax deposited on 10.7.95, the jurisdiction to impose the penalty could not be exercised.
12. Mr A.K.Vali, learned Senior Standing Counsel for the respondent-Union of India has supported the impugned orders passed by the ACC and the Govt. of India respectively on all counts on the pleas as set out in the counter.
13. Having heard the learned counsel for the parties, we are of the opinion that the petition must fail on all the counts. We proceed to deal with each of the contentions raised on behalf of the petitioners and assign our reasons for repelling the same.
14. It is not disputed that the Rules provide for a time limit by which the tax collected by the airlines has to be deposited with the Central Government. The failure to pay tax occurs soon on the expiry of the date appointed for payment. means read is not an ingredient of sub-sec(3) of Section 46 quoted in para 3 above. The expression ''fails to pay'' is not accompanied by any qualification such as ''deliberately'' ''with out reasonable cause'' "intentionally" or the like. Thus the liability to pay the penalty is attracted and jurisdiction to impose the penalty arises immediately on failure of the airlines to pay the amount to the credit of the Central Government by the appointed date, the tax having been already collected by the airlines.
15. The learned counsel for the petitioner has relied on
"The liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from the bona fide belief that the offender is not liable to act in the manner prescribed by the statute."
16. It is not necessary to deal with each of the cases individually. Suffice it to observe that each of the cases relied on by the learned counsel for the petitioner is distinguishable and has no applicability to the facts of the case at hand. The test for the applicability of the principle propounded by the learned counsel for the petitioner may be so stated. The facts and circumstances of a given case may attract the applicability of a provision to impose penalty may and yet not impel the exercise of that power if the provision itself vests discretion in the authority to impose or not to impose a penalty. Penalty may not be imposed when the alleged fault or default is trivial or technical merely. Where the jurisdiction to impose the penalty itself is not attracted or when the authority concerned is not inclined to invoke the penal provision at all then the question of imposing a minimum penalty looses all its significance. However, if the jurisdiction to impose the penalty is attracted and also exercised then the authority exercising the jurisdiction cannot in the name of discretion afford to by-pass and ignore the provision for minimum penalty statutorily prescribed.
17. The case of Akbar Badrudin Zibani (supra) was under the Customs Act and their Lordships had formed an opinion (vide para 61) that the import was on a bonafide belief that the stone slabs were not marble and hence the imposition of a heavy fine was not at all warranted and justified.
18. The case of Hindustan Steels Ltd. (supra) was under the Orissa Sales Tax Act. The assessed was acting honestly and under a genuine belief and hence in the opinion of their Lordships no case for imposing penalty was made out.
19. The case of Cement Marketing Co. of India Ltd. (supra) was under the Sales Tax Act wherein it was held that liability for penalty was not attracted if the assessed was belabouring under a bonafide contention, though wrongly.
20. The case of M/s.Pioneer Traders (supra) merely speaks that the jurisdiction to impose penalty is quasi-judicial in nature.
21. In the case at hand jurisdiction to impose the penalty was attracted. The Assistant Collector of Customs as also the Central Government have recorded findings of fact whereon is based the conclusion that there was a failure on the part of the petitioner to deposit the amount of tax and the delay could not be said to be bonafide. The delay was certainly not trivial or technical merely. Once the jurisdiction to impose the penalty was attracted, the discretion conferred on the authority could play only between the two boundaries statutorily provided i.e. not less than 1/5th as minimum and not more than three times as maximum of the amount of the tax not so paid. The penalty imposed on the petitioner is just near the minimum. We can read nothing in the provision of Section 46 so as to spell out a discretion to impose a penalty less than the minimum vesting in the authority. To accept the contention of the learned counsel for the petitioner would amount to rewriting the law which this Court cannot do and could certainly not have been done by any of the authorities imp leaded as respondents.
22. It is well settled that while interpreting the law, it is permissible to iron out the creases but the texture out of which a legislative provision is woven cannot be altered, supplied or taken away. The first and second contentions raised on behalf of the petitioners are, Therefore, rejected.
23. Incidentally, the learned counsel for the respondent has invited our attention to the document Annexure-B ( page 50) of the paper book which is a statement filed by the petitioners showing the date wise details of the deposits of tax by the petitioners with the Central Government and the months for which the deposit related. This statement shows the collections for the months of January, 1994, February, 1994, March, 1994, April, 1994, May, 1994 and January, 1995 having been made respectively on 4.4.94, 22.6.94, 16.9.94, 20.9.94 and 20.4.95 in support of his submission that the delay in question was not just an aberration but the petitioners were making belated deposits more often then not. Prima facie, the learned counsel for the respondent appears to be right. It is not the case of the petitioners that they had at any time invoked the proviso to Rule 6 and sought for extension of time from the Collector of Customs.
24. The third contention, though attractive on its face, is found to be devoid of any substance of a little probe. It is true that vide letter dated 29.6.95 ( quoted in para 4 above), ACC (IAIT) had asked the petitioner to file the required return and deposit the amount in arrears within seven days. However, this letter cannot be treated as extending the time for filing the return and making the deposit of IATT which is statutorily prescribed. This is for two reasons. Firstly, the statute nowhere confers jurisdiction on ACC to extend the time prescribed for filing the return and depositing the amount of tax collected. Secondly, the ACC has nowhere granted extension of time to the petitioners. In the background of the delay which had taken place the ACC was simply reminding the petitioners of their obligation and the default already incurred followed by an insistence to still make the compliance within seven days. The letter cannot be interpreted as having condoned the delay absolving the petitioners from the penal consequences flowing from the default already committed by them.
25. As all the contentions raised by the learned counsel for the petitioner fail, the petition is held liable to be dismissed and is dismissed accordingly.
No order as to costs.
