2007 (3) TMI 718 - HC - VAT and Sales Tax

Summary

Issues:
1. Penalty under section 15A(1)(g) of the U.P. Trade Tax Act, 1948 for the assessment year 1997-98.

Analysis:
The case involved a revision under section 11 of the U.P. Trade Tax Act, 1948 challenging the penalty levied under section 15A(1)(g) of the Act at Rs. 4,800 for the assessment year 1997-98. The applicant, running a sweetmeat shop, was brought on record based on a survey report where discrepancies in turnover were noted. The applicant contended that it was the first year of business, turnover was below the taxable limit, and there was confusion regarding the survey details. The assessing authority imposed the penalty despite the applicant's explanations.

The High Court analyzed the facts and submissions of both parties. It noted that the applicant had disclosed sales which were later enhanced through best judgment assessment. The applicant had filed objections disputing the survey report and had not been directed to apply for registration or been issued any provisional assessment order. The court found that the applicant was under a bona fide belief that the objections were accepted, hence did not apply for registration. The disclosed turnover was below the taxable limit, and the court concluded that the penalty was not justified based on the circumstances.

Therefore, the High Court allowed the revision, setting aside the Tribunal's order and quashing the penalty under section 15A(1)(g) of the Act for the assessment year 1997-98.