2008 (7) TMI 901 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 15A(1)(r) of the U.P. Trade Tax Act, 1948 in relation to penalty imposition for contravention of provisions.
Validity of penalty order in case of using form XXXI for importing coal for job-work.
Legality of penalty notice without mentioning the proposed penalty amount.

Analysis:
The judgment involves two revisions concerning the applicability of section 15A(1)(r) of the U.P. Trade Tax Act, 1948, for the assessment years 1994-95 and 1995-96. The dispute revolves around a dealer importing coal using form XXXI for job-work in refining oil. The authorities alleged contravention as the coal was not directly used in the dealer's business. However, the Tribunal set aside the penalty order citing that a common penalty for two different offenses is impermissible, relying on a precedent. The Tribunal's decision was influenced by a judgment stating that consolidated penalty imposition is illegal.

In addressing the questions of law raised in the memo of revision, the court first considered whether the penalty order could be set aside based on the mentioned precedent. The court referred to a Supreme Court judgment that clarified the definition of "business" under the U.P. Trade Tax Act, including job work within its scope. Consequently, it was found that the penalty under section 15A(1)(r) was not applicable in this case since the dealer's use of coal for job-work did not contravene any act or rule. The court emphasized that job-work falls under the definition of "business" as per the apex court's interpretation.

Regarding the issue of the legality of the penalty notice without specifying the proposed penalty amount, the court deemed this ground invalid, stating that the absence of the proposed penalty amount does not invalidate the penalty proceedings. Consequently, the court concluded that the decision on question No. 1 was unnecessary due to the resolution of question No. 3. Ultimately, the court found no merit in the revisions and dismissed them without imposing any costs.