2014 (2) TMI 534 - HC - VAT and Sales Tax

Allegation of crossing of goods from check post without form 31 - Levy of Penalty under Section 15-A(1) (O) of the Trade Tax Act - Violation of Section 28-A - Held that - The penalty was imposed on the amount shown by the revisionist for the purchases. The same was not disturbed by the A.O. The only charge is that Forms 31 were not produced at the check posts. The revisionist has also not informed the department within the prescribed time but fact remains that how the officers at the check posts had allowed to cross the goods of the revisionist without proper paper or verification of Forms-31. Nowhere, it is mentioned that the department has taken any action against the said officers. Similarly, when the revisionist has not informed the department within the prescribed time, then how the department has issued Form 31 time to time without getting the verification of the previous Forms. - there is no concealment/malafide intention - revisionist has concealed the imported goods or resale the same. - the mere breach of provision of Section 28-A would not be sufficient for levy of penalty under Section 15-A (1)(o) of the Act - Decided in favour of assessee.

Summary

Issues Involved:
Violation of Section 28-A of U.P. Trade Tax Act leading to penalty imposition.

Analysis:
The case involved a revision under Section 11(1) of the U.P. Trade Tax Act against the penalty imposed by the Trade Tax Tribunal for the assessment year 1998-99. The petitioner, a partnership firm engaged in civil contracts, had opted for a compounding scheme under Section 7-D of the U.P. Trade Tax Act for the payment of composition fee. The firm was penalized for not showing 57 import declaration forms at check posts, leading to a penalty of Rs. 5,38,778 under Section 15-A(1)(o) of the Act. The penalty was upheld by lower authorities. The petitioner argued that similar treatment should be given as no penalty was levied for previous or subsequent years where compounding scheme was accepted.

The petitioner contended that the imported goods were used exclusively for contract completion, not for resale, and that the compounding scheme was accepted by both the petitioner and the department for other years. The petitioner voluntarily disclosed the imported items for the year in question, which were accepted by the assessing officer. The petitioner's counsel cited precedents to support the argument for cancellation of the penalty.

The Standing Counsel argued that the petitioner failed to produce the necessary forms at check posts or inform the department about import of goods, violating Section 28-A. The petitioner's delay in providing information hindered verification. However, the court noted that the books of accounts were never rejected, and the penalty was imposed solely for not producing Forms 31 at check posts. The court questioned how goods were allowed to pass without proper verification and noted the lack of departmental action against officers at check posts. The court found no concealment or malafide intention, citing relevant case law, and concluded that the breach of Section 28-A was not sufficient for penalty imposition.

In the final judgment, the court allowed the revision, setting aside the penalty imposed by lower authorities and canceling the levy of penalty. The court emphasized that the petitioner did not intend to cause revenue loss or engage in evasion, hence ruling in favor of the petitioner.