2003 (3) TMI 735 - HC - VAT and Sales Tax

Summary

Issues:
Violation of Section 28-A - Penalty under Section 15-A (1) (o) - Attempt to evade tax - Form 31 endorsement - Assessment Year 1980-81.

Detailed Analysis:

1. Violation of Section 28-A:
The case involves the violation of Section 28-A concerning the import of goods without the necessary documentation. The applicant had imported raw materials and splints valuing a significant amount, but some goods worth &8377; 11,33,901.91 arrived without the required Form 31 endorsement at the Check Post. This violation led to the initiation of proceedings under Section 15-A (1) (o) for penalty imposition.

2. Penalty under Section 15-A (1) (o):
The Assessing Authority levied a penalty of Rs. 5 lakh under Section 15-A (1) (o) for the alleged violation. However, the Deputy Commissioner (Appeal) partially allowed the appeal, reducing the penalty to &8377; 3,26,000. Subsequently, the Tribunal rejected the second appeal, prompting the applicant to file a revision against the Tribunal's decision.

3. Attempt to Evade Tax - Form 31 Endorsement:
The applicant, a manufacturer of safety matches, argued that the goods were directly sent to the factory siding, making it impossible to get Form 31 endorsed before taking delivery. The applicant contended that the goods were duly recorded in the books of account and disclosed during assessment, indicating no intent to evade tax. The court analyzed the facts and determined that there was no attempt to evade tax based on the disclosure of imported goods and lack of evidence supporting tax evasion.

4. Legal Precedents and Interpretation:
The judgment referenced legal precedents to support the argument that penalty imposition requires evidence of an attempt to evade tax. Citing cases like Jain Sudh Vanaspati v. Commissioner of Sales Tax and M/s. Oriental Carbon Ltd. v. Commissioner of Sales Tax, the court highlighted that mere technical violations, such as Form 31 endorsement issues, do not automatically warrant penalty imposition under Section 15-A (1) (o) unless there is clear evidence of tax evasion.

5. Court's Decision:
After a thorough analysis of the facts and legal principles, the court allowed the revision and set aside the Tribunal's order dated 27th August 1991. The court canceled the penalty imposed under Section 15-A (1) (o), emphasizing that in this case, where the imported goods were disclosed in the books of account and shown during assessment, there was no basis to infer an attempt to evade tax.