2002 (8) TMI 810 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Seizure of goods without "Form No. 31".
2. Intention to evade payment of tax.
3. Legal precedents and interpretations of Section 28-A and Section 13-A(6) of the U.P. Trade Tax Act.
4. Requirement of accompanying documents during transportation of goods.
5. Penalty imposition and release of seized goods.

Detailed Analysis:

1. Seizure of Goods Without "Form No. 31":
The applicant, a public limited company, purchased component parts of electric meters from a supplier in Delhi. The consignment was intercepted by the Trade Tax Officer, Mobile Squad, on April 8, 2002, and found to be without the required declaration "Form No. 31". Consequently, the goods were seized, and a security amount was demanded for their release.

2. Intention to Evade Payment of Tax:
The applicant argued that the omission of "Form No. 31" was inadvertent and not an attempt to evade tax. The goods were raw materials, not meant for resale, and were sold to the State Electricity Board, which entitled the applicant to certain tax benefits. The Tribunal dismissed the appeal, maintaining that the absence of "Form No. 31" indicated an intention to evade tax.

3. Legal Precedents and Interpretations of Section 28-A and Section 13-A(6) of the U.P. Trade Tax Act:
The judgment referenced several cases, including:
- Jain Shudh Vanaspati Ltd. v. State of U.P. [1983] 53 STC 54 (All.): Absence of requisite documents alone is insufficient to sustain a penalty unless there is material evidence of an intention to evade tax.
- Commissioner of Sales Tax v. Toni Electronics Ltd. [1998] UPTC 640: The penalty was knocked off as the goods were imported without "Form No. 31", but there was no intention to evade tax.
- Deshraj Singh v. Commissioner of Trade Tax [1995] UPTC 871 and Elder Pharmaceuticals Limited v. Commissioner of Trade Tax [1999] 115 STC 448 (All.): Seizure of goods was unjustified when there was no material to believe an attempt to evade tax was being made.

4. Requirement of Accompanying Documents During Transportation of Goods:
Rule 83(4) of the U.P. Trade Tax Rules mandates that the owner, driver, or person-in-charge of the vehicle must carry specific documents, including "Form No. 31", cash memo, bill, or challan, and a trip sheet. The applicant failed to comply with these requirements, leading to the seizure of goods.

5. Penalty Imposition and Release of Seized Goods:
The judgment discussed the applicant's compliance with the stay order conditions and previous cases where goods were released without further security upon partial payment of the penalty. The court directed the release of the seized goods without further security demand, considering the penalty had already been partially paid.

Conclusion:
The court disposed of the trade tax revision, directing the release of the seized goods without any further security demand. The proceedings for finalizing the penalty were to continue before the Deputy Commissioner, and the observations made by the court were not to influence those proceedings.

Ordered accordingly.