2006 (8) TMI 578 - HC - VAT and Sales Tax

Summary

Issues:
1. Revision under section 11 of the U.P. Trade Tax Act, 1948 against Tribunal's order for assessment year 1991-92.
2. Dispute regarding taxable purchases and sales of deshi ghee and skimmed milk powder.
3. Estimation of suppressed sales by the assessing authority and Tribunal.
4. Penalty levied under section 15A(1)(c) for concealed turnover.
5. Justification and quantum of penalty.

Analysis:
1. The revisions under section 11 of the U.P. Trade Tax Act, 1948 were filed against the Tribunal's order related to the assessment year 1991-92. The applicant, engaged in the business of manufacturing and selling deshi ghee and skimmed milk powder, faced discrepancies in the reported purchases and sales figures.

2. The assessing authority and Tribunal disagreed on the taxable purchases and sales of deshi ghee and milk powder. The assessing authority rejected the books of account and estimated the taxable purchases and sales, while the Tribunal partially allowed the appeal and estimated suppressed sales based on a survey conducted in August 1992.

3. The Tribunal estimated suppressed sales of deshi ghee and milk powder, taking into account the production discrepancies detected over a specific period. The assessing authority and Tribunal differed in their calculation methods, leading to varying estimations of concealed turnover.

4. The penalty under section 15A(1)(c) was imposed based on the concealed turnover. The Tribunal reduced the penalty from the assessing authority's initial levy, considering the circumstances of the case. The applicant challenged the penalty as excessive and arbitrary, while the Standing Counsel argued for the restoration of the original penalty.

5. The High Court upheld the justification for the penalty under section 15A(1)(c) due to specific concealments found in the loose purchase slips seized during a survey. The Court determined the quantum of penalty, considering the first year of business, the duration of concealment, and the reasonableness of the penalty amount. Ultimately, the Court allowed the applicant's revision in part and dismissed the Commissioner's revision, maintaining a reduced penalty amount.