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2006 (9) TMI 529 - HC - VAT and Sales Tax
Issues:
Assessment of penalty under section 13A(4) of the U.P. Trade Tax Act, 1948 for alleged omission of goods from accounts and registers. Analysis: The case involved a revision under section 11 of the U.P. Trade Tax Act, 1948 against an order of the Tribunal related to the assessment year 1991-92. The applicant was engaged in the business of DMO and mentha oil and had sold goods to a buyer. The goods were checked during transit, and a show-cause notice was issued due to doubts about the bill. The Trade Tax Officer seized the goods and demanded security, which was confirmed by the Assistant Commissioner. The Tribunal allowed the appeal against the seizure but directed the assessing authority to consider proceedings under section 13A(4) of the Act. The assessing authority imposed a penalty, which was upheld in the first appeal and second appeal before the Tribunal. The Tribunal inferred that the goods were transported outside the books of account based on the manner in which the bill was issued and the loose form of the stock register. The applicant contended that the adverse inference drawn by the Tribunal was erroneous as the goods were accompanied by the bill during checking, and entries were duly maintained in the books of account. The penalty under section 13A(4) can only be imposed if goods were wilfully omitted from the accounts, which was not the case here. The authorities' inference that the goods were not shown in the books of account due to the manner of bill issuance was deemed unfounded. The High Court held that the penalty was not sustainable as no evidence supported the claim of deliberate omission of goods from the records. The adverse inference drawn by the Tribunal was deemed baseless and lacking material evidence, leading to the setting aside of the Tribunal's order and the quashing of the penalty. Therefore, the High Court allowed the revision, set aside the Tribunal's order, and quashed the penalty imposed under section 13A(4) of the U.P. Trade Tax Act, 1948.
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