Levy of mandatory fee for delayed filing of TDS return & Sec 234E is constitutionally valid

Levy of mandatory fee for delayed filing of TDS return & Sec 234E is constitutionally valid;

Delay in filing TDS returns has cascading effect and IT Department cannot process deductee's tax status until TDS return is filed by deductor; Delay in filing TDS return results in additional burden upon department due to deductor's fault, hence levy of fee u/s 234E is to compensate for additional work burden forced upon the Department ; HC observes that "Section 234E of the Act is not punitive in nature but a fee which is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statements"; TDS return is regularised by paying fee u/s 234E, and is a privilege and special service provided to deductor by allowing him to submit TDS return beyond due date; HC rejects petitioner's argument that fee u/s 234E is collected in the guise of tax; Absence of "right to appeal" against Sec 234E fee cannot make levy & section invalid ; HC says " It must be noted that a right of appeal is not a matter of right but is a creature of the statute, and if the Legislature deems it fit not to provide a remedy of appeal, so be it"; Statute relating to economic activities should be viewed with greater latitude than laws touching civil rights  : Bombay HC

The ruling was delivered by Chief Justice Mohit Shah and Justice B. P. Colabawalla.

[TS-44-HC-2015(BOM)]