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2013 (6) TMI 230 - HC - VAT and Sales TaxInter state sale or local sale - The assessing authority inferred that the goods have been sold inside the State of U.P. He valued the goods and levied penalty to the extent of 40% of the value of the goods in both the cases. - held that - the applicant failed to rebut the presumption under Section 28-B of the Act that the goods have not been sold inside the State of U.P. and have gone outside the State of U.P. Section 28-B of the Act is a machinery Section. It has been introduced in the Statute to check the evasion of the tax. If the goods are coming from the outside of the State of U.P. and are intended to be transported outside the State of U.P., the person concerned has to obtain transit pass at entry check post and has to surrender the same at the exit check post so that it may be established that the goods are not being sold inside the State of U.P. and has gone outside the State of U.P. In case of failure to surrender the transit pass at the exit check post, Section 28-B contemplates presumption of sale of goods inside the State of U.P. Undoubtedly, the presumption is a rebutable presumption which can be rebutted by adducing evidence. In the present cases, as stated above, the applicant failed to rebut the presumption. - Decided against the assessee.
Issues:
1. Interpretation of Section 28-B of the U.P. Trade Tax Act. 2. Rebuttal of presumption of sale of goods inside the State of U.P. 3. Assessment of penalty under Section 15-A(1)(q) of the Act. 4. Evaluation of evidence presented by the applicant. 5. Decision of the Tribunal to reduce the penalty. Interpretation of Section 28-B of the U.P. Trade Tax Act: The case involved the application of Section 28-B of the U.P. Trade Tax Act, which outlines the procedure for transporting goods across state borders to prevent tax evasion. The section mandates obtaining and surrendering transit passes at entry and exit check posts to demonstrate that goods are not sold within the state. Failure to comply results in the presumption of goods being sold within the state, triggering penalties. Rebuttal of presumption of sale of goods inside the State of U.P.: The applicant attempted to rebut the presumption by providing evidence that the goods had crossed the state borders and were delivered to the purchaser outside U.P. Documents such as toll receipts, diesel purchase receipts, and certificates from the purchaser were submitted to support the claim. However, discrepancies in the evidence and failure to produce certain crucial documents led to the authorities concluding that the applicant failed to rebut the presumption effectively. Assessment of penalty under Section 15-A(1)(q) of the Act: The assessing authority imposed a penalty of 40% of the value of goods for alleged violations related to non-surrender of transit passes at exit check posts. The penalty was later reduced to 20% by the Tribunal. The issue of penalty assessment was crucial in determining the financial repercussions on the applicant due to the alleged non-compliance with statutory requirements. Evaluation of evidence presented by the applicant: The applicant submitted various documents such as toll receipts, diesel purchase receipts, and certificates to support their claim that goods had crossed state borders. However, the authorities raised concerns about the authenticity and relevance of some of the evidence, highlighting discrepancies and missing information that weakened the applicant's case. Decision of the Tribunal to reduce the penalty: The Tribunal partially allowed the appeals by confirming the penalty but reducing it to 20% of the value of goods. This decision indicated a consideration of the circumstances and evidence presented by the applicant, leading to a modification in the penalty amount imposed by the assessing authority. In conclusion, the High Court dismissed both revisions, finding them devoid of merit due to the applicant's failure to effectively rebut the presumption under Section 28-B of the Act. The judgment emphasized the importance of complying with procedural requirements to prevent tax evasion and highlighted the significance of presenting clear and consistent evidence to support claims in tax-related matters.
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