M/S. HOTEL DARPAN, MUSSORIE versus SUB-DIVISIONAL MAGISTRATE, MUSSORIE AND ANR.

Citation: [1995] SUPP. 5 S.C.R. 685 · Decided: 27-11-1995 · Supreme Court of India · Bench: B.P. JEEVAN REDDY, S.B. MAJMUDAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

-
M/S. HOTEL DARP AN, MUSSORIE 
v. 
SUB-DIVISIONAL MAGISTRATE, MUSSORIE AND ANR. 
NOVEMBER 27, 1995 
[B.P. JEEVAN REDDY & S.B. MAJMUDAR, JJ.] 
Taxation Law--U.P. Taxation and Land Revenue Laws Act 1975-Sec-
tion ](}-Provision only to levy penalty for failure to pay amount payable under 
Sections 5 & ?within the prescribed time, for failure to supply any information 
asked for by the relevant authorities or for supplying false information-Non-
filing of return-No penalty can be levied under s.10. 
A 
B 
c 
The Appellant who is the proprietor ofa hotel in Mussorie, U.P., was 
served notice under Section 10 of the U.P. Taxation and Land Revenue 
Law. The assessing authority had asked the Appellant to deposit the luxury D 
tax on the monthly lodging and boarding of his hotel by the fifth of the 
followin~ month. When the appellant failed to so deposit, he was called to 
produce all the documents and inter alia deposit a sum of Rs. 5000. A 
second notice was thereafter served asking the Appellant to deposit Rs. 
5000 within a week and in case he defaulted, the Appellant was liable to 
pay a further fine of Rs. 100 per day in addition to 10% collection charge. E 
The Appellant challenged these two notices before the High Court. 
The contention before the High Court was that under Section 10 of 
the U.P. Taxation and Land Revenue Act, no fine can be imposed. The High 
Court rejected the same holding that, if the return is not furnished, then F 
the concerned authority can impose penalty under Section 10 of the Act 
and so there was no illegality in the levy of fine. 
In appeal to this Court, it was submitted on behalf of the Appellant 
that, the penalty in this case was levied for non- filing of the return within G 
the time given and not for non-payment of any amount due or for non-
supply of any information asked for by the authorities. For non-filing of 
return the authorities could only make a best judgment assessment under 
rule 6(5) or the rules. Therefore, the authorities could not levy any fine. 
Allowing the Appeal, this Court 
685 
H 
A 
B 
c 
686 
SUPREME COURT REPORTS [1995JSUPP. 5 S.C.R. 
HELD : 1. The two notices/orders impugned in the writ petition are 
ambiguous and do not make it clear whether the amount of Rs. 5000 
mentioned therein is a tax or a penalty. The impugned notices also speak of 
fine but do not say, under which provision are they levied. In these cir-
cumstances, the proper course, is to quash the two orders/notices impugned· 
in the writ petition with a direction to the assessing authority to pass 
appropriate orders afresh in accordance with law, after hearing the asses-
see, keeping in view the position of law explained in this judgment. The 
authority can also ascertain whether the appellant's case that he has 
deposited Rs. 10,000 in advance is correct and, if so, what is its effect in law 
- and its relevance in the matter oflevy of penalty, fine or interest. [690-C-D] 
2. Section 10 of the U.P. Taxation and Land Revenue Act is the only 
provision in the Act providing for levy of taxes. Sub-section (1) provides 
for levy of penalty on conviction for failure to pay sum payable under 
Section S or Section 7 within the prescribed period. Sub-section (2) 
provides for· levy of penalty on two grounds, viz, failure to supply any 
D information which the person concerned is called upon to supply under 
the rules or where the person knowingly supplies false information. For 
not filing the return, it is true, no penalty can be levied under Section 10. 
The assessee shall not be entitled to raise any objection on the ground of 
limitation. He shall, of course, be free to raise all such other grounds as 
E 
are open to him in law. [690-A-B; E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11260 of 
1995. 
From the Judgment and Order dated 24.2.95 of the Allahabad High 
F 
Court in C. Misc. W.P. No. 1694 of 1993. 
Manoj Swarup for the Appellant. 
Irshad Ahmad for the Respondents. 
G 
The following Order of the Court was delivered : 
Leave granted. Heard counsel for both the parties. 
This appeal arises from the order of the Division Bench of the 
Allahabad High Court dismissing the writ petition, filed by the appellant 
H herein, with certain directions. The matter arises under the Uttar Pradesh 
HOTEL DARP AN v. SUB-DVNL. MAGISTRATES 
687 
Taxation and Land Revenue Laws Act, 1975. 
The appellant is the proprietor of a hotel, Hotel - Darpan, at 
Mussoorie. Section 4 of the U.P. Act imposes a luxu

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