1989 (7) TMI 329 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under section 13-A(4) of the U.P. Sales Tax Act, 1948.
2. Interpretation of provisions related to seizure of goods and imposition of penalties.
3. Consideration of absence of bill and challan in the import of goods.
4. Justification of penalty imposition based on intention of dealer not to show goods in account books.

Analysis:
The petitioner sought to quash the Sales Tax Tribunal's order imposing a penalty under section 13-A(4) of the U.P. Sales Tax Act, 1948. The petitioner's goods were seized at an entry check-post by sales tax authorities during transportation from Delhi to U.P. The authorities alleged that the goods were not accounted for in the petitioner's records and were sold within U.P. outside the books, leading to the imposition of a penalty of Rs. 67,000 by the Assistant Commissioner (Assessment). The petitioner's appeals to higher authorities were unsuccessful, resulting in a reduced penalty of Rs. 30,000 by the Sales Tax Tribunal. The petitioner then filed a revision in the High Court, challenging the penalty imposition.

The main issue revolved around the justification of imposing the penalty under section 13-A(4) by the authorities. Section 13-A(1) allows seizure of goods not accounted for in a dealer's records, while subsection (4) authorizes penalties if goods were wilfully omitted from being shown in accounts, registers, or other business documents. The Court analyzed the provisions and emphasized that the seized goods were at a check-post, not at the business premises where entries are made. The Court highlighted that the omission to show goods in account books was not willful as the goods were seized before reaching the destination, where entries would typically be made.

The Court further addressed the argument regarding the absence of bill and challan during the import of goods. It clarified that penalties under section 13-A(4) are not applicable for importing goods without these documents. Instead, penalties for such violations are covered under section 15-A(1)(o) and section 28-A of the Act. The Court emphasized the specific requirements for import declarations and documents, stating that penalties under section 13-A(4) were not justified in this case.

Additionally, the Court rejected the Revenue's argument that the dealer's intention not to show goods in account books justified the penalty. The Court emphasized that penalties under section 13-A(4) can only be imposed when goods are willfully omitted from accounts after reaching the destination. The Tribunal's finding that the dealer intended not to make entries in account books was deemed insufficient to justify the penalty.

Consequently, the High Court allowed the writ petition, quashed the Tribunal's order, and directed the refund of Rs. 30,000 if deposited by the petitioner. The Court held that the penalty imposition under section 13-A(4) was not sustainable in this case, emphasizing the specific requirements and conditions for imposing such penalties under the U.P. Sales Tax Act.