2009 (1) TMI 826 - HC - VAT and Sales Tax

Penalty proceedings under section 15A(1)(o) of the U.P. Trade Tax Act challenged - Held that - In the present case, the applicant had disclosed the purchase of imported goods in the books of account and shown such purchases before the assessing authority at the time of the assessment and the books of account submitted by the applicant were accepted by the assessing authority, therefore, no inference can be drawn that there was any attempt to evade the tax. Even in the order of the assessing authority imposing penalty no finding has been recorded that the applicant had imported goods without form XXXI with an intention to evade payment of tax. Thus, for the aforesaid reasons, the revision is allowed. The order dated January 12, 2009 passed by the Commercial Tax Tribunal, Lucknow in Second Appeal No. 3 of 2009 is set aside to the extent requiring the applicant to deposit five per cent of the amount awarded as penalty.

Summary

Issues:
1. Challenge to commercial tax revision judgment by applicant.
2. Imposition of penalty under section 15A(1)(o) of the U.P. Trade Tax Act.
3. Disputed penalty amount and recovery proceedings.
4. Legal principle regarding intention to evade tax and disclosure of imported goods.
5. Requirement of deposit for staying recovery of penalty.
6. Attachment of applicant's bank account.

Analysis:
1. The applicant challenged the judgment and order of the Commercial Tax Tribunal, Lucknow, seeking to set aside/modifying the penalty imposed under section 15A(1)(o) of the U.P. Trade Tax Act for the assessment year 2003-04.
2. The applicant, a Government of India undertaking, disclosed its purchases of petroleum products and goods received from outside U.P. during assessment proceedings. The assessing authority later imposed a penalty alleging a violation of section 28A, despite the applicant's submission that goods were received at its own railway siding and forms were submitted monthly.
3. Various appeal stages ensued, with the Joint Commissioner (Appeals) initially staying 50% of the penalty demand, which was later set aside, leading to multiple appeals and orders regarding the penalty amount and recovery proceedings.
4. The legal contention revolved around the absence of intention to evade tax when imported goods were disclosed in the books of account and shown during assessment. Precedents were cited to support the argument that penalty cannot be imposed solely based on the absence of form XXXI for imports.
5. The Commercial Tax Tribunal's requirement for the applicant to deposit 5% of the penalty amount for staying recovery during the first appeal was challenged as unsustainable, given the lack of intention to evade tax and the disclosure of imported goods.
6. The applicant's bank account was attached during recovery proceedings, prompting a request for its release, which was granted following the court's decision to set aside the requirement for the deposit.

This detailed analysis covers the legal intricacies and proceedings involved in the judgment, addressing each issue comprehensively while preserving the key legal terminology and significant details from the original text.