2010 (1) TMI 1166 - HC - Wealth-tax

Summary

Issues involved:
The judgment involves the imposition of penalty on the assessee under Section 15-A(1) (o) of the U.P. Trade Tax Act for the Assessment Year 2002-03, based on the order of the Tribunal dated 28th of March, 2006.

Issue 1: Justification of penalty imposition based on previous judgments
The questions of law framed include whether the imposition of penalty is justified based on previous judgments such as M/s Network Limited, Noida v. Commissioner Trade Tax, Commissioner Sales Tax v. Jaipur Golder Transport Co., Central Footwear Varanasi v. Commissioner Sales Tax, and Commissioner Sales Tax v. Micro Foam Industries Limited.

Issue 2: Justification of penalty imposition despite filing Form 31
The issue arises as to whether the levy of penalty is justified even though Form 31 was filed along with the reply to show cause notice before the seizure.

Issue 3: Justification of penalty imposition based on additional judgments
Another question is whether the imposition of penalty is justified in light of judgments like M/s Kalyan Plastic Industries v. Commissioner Sales Tax, DCM Limited v. Commissioner Sales Tax, Commissioner Sales Tax v. M/s Garg Associates Pvt. Limited, and M/s WIMCO Limited v. Commissioner Sales Tax.

Issue 4: Import of goods as raw material and penalty imposition
The matter questions whether the penalty imposition is justified if the goods were imported as raw material and not meant for resale, and if the goods were imported against form 'C' with relevant entries duly made in the books of accounts.

Issue 5: Penalty imposition for goods imported through Bank
It is raised whether the authorities were justified in imposing a penalty when the goods were being imported through a Bank.

Issue 6: Overall justification of penalty amount
Lastly, the question is posed whether, in any view of the matter, the imposition of a penalty of Rs. 1,27,206 is justified.

Issue 7: Validity of the Trade Tax Tribunal's order
Considering the facts and circumstances of the case, the query is whether the order passed by the Trade Tax Tribunal is justified.

The judgment details the case where the assessee placed a purchase order for H.R. Coils from M/s ESSAR Steels Limited, New Delhi, and imported the raw material to NOIDA. Despite the submission of Form-31 along with a detailed reply to the show cause notice, the raw material was found unsupported by Form-31 upon inspection. Consequently, a penalty was imposed under Section 15A(1) (o) of the U.P. Trade Tax Act, which was upheld in the lower appeals.

Upon review, the High Court found that the Forms-31 submitted by the assessee were not false or forged, and no discrepancy was found in the Forms-31 produced before the seizure order. As a result, the Court concluded that the imposition of penalty was not justified as there was no intention to evade tax reflected in the documents. Therefore, the penalty was deleted, and the revision was allowed.