2014 (3) TMI 548 - HC - VAT and Sales Tax

Imposition of penalty u/s 54(1)(14) of U.P. Value Added Tax Act, 2008 - Non filling of details under Form 38 Intention to evade tax - contravention of Section 50 or Section 51 r/w Rule 56(1) - Held that - Decision in M/s. JSW Steel Ltd. Versus The Commissioner, Commercial Taxes 2014 (2) TMI 858 - ALLAHABAD HIGH COURT followed- Declaration form was not duly filled in, as required u/s 50 and 51 r/w Rule 56(1) thus, there was contravention of provision of Section 50(1) of Act, 2008 - The Assessing Authority has recorded that by keeping column 6 of Form 38 blank, such declaration form can be repeatedly used for successive import so as to evade payment of tax - These are all concurrent findings of fact and satisfy requirement of Section 54(1)(14) so as to justify imposition of penalty. The relevant charging incidents u/s 54(1)(14) of Act, 2008 are that there must be contravention of provisions u/s 50 or 51 and the contravention must be with a view to evade payment of tax of sale of such goods or goods manufactured, processed or packed by using such goods etc. Mere contravention of Section 50 or 51 but without any intention to evade tax would not attract penalty - Before imposing penalty, authority concerned has to record a finding either on the basis of material before it or produced by the dealer or any other person or the Department, which may include incomplete form 38 that there was an intention to evade payment of tax - The order of the Tribunal upheld - Decided against assessee.

Issues Involved:
1. Imposition of penalty under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 due to Column 6 of Form 38 being left blank.
2. Imposition of penalty in the absence of intention to evade tax.
3. Justification for penalty solely based on the non-filling of Column 6 of Form 38.
4. Whether leaving Column 6 of Form 38 blank constitutes a contravention of Section 50 or Section 51 of the Act, 2008.

Detailed Analysis:

Issue 1: Imposition of penalty under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 due to Column 6 of Form 38 being left blank.
The court examined whether a penalty can be levied solely based on Column 6 of Form 38 being left blank when other accompanying documents like the tax invoice and G.R. bearing bill number were present. The Tribunal argued that leaving Column 6 blank could allow Form 38 to be used repeatedly for different transactions, thus facilitating tax evasion. The court emphasized that the statutory requirement is for the declaration form to be "duly filled" and signed by the concerned parties. The court concluded that a declaration form not duly filled in contravenes the statute, thus justifying the penalty.

Issue 2: Imposition of penalty in the absence of intention to evade tax.
The court reiterated that mere contravention of Sections 50 or 51 without any intention to evade tax does not attract penalty under Section 54(1)(14). The court cited previous judgments, including Rama Pulses Vs. State of U.P., which held that there must be a finding of intention to evade tax for a penalty to be imposed. The Tribunal in this case inferred an intention to evade tax based on the repeated instances of Column 6 being left blank, which could facilitate the reuse of Form 38 for multiple transactions.

Issue 3: Justification for penalty solely based on the non-filling of Column 6 of Form 38.
The court reviewed several precedents where penalties were imposed solely for non-filling of Column 6. It highlighted that the non-filling of Column 6 could lead to the repeated use of Form 38, thus indicating an intention to evade tax. The Tribunal's findings that Column 6 was left blank in multiple instances supported the inference of tax evasion intention. The court upheld the Tribunal's decision, stating that non-filling of Column 6, when done repeatedly, is not a clerical error but a deliberate act to evade tax.

Issue 4: Whether leaving Column 6 of Form 38 blank constitutes a contravention of Section 50 or Section 51 of the Act, 2008.
The court analyzed the statutory provisions and concluded that a declaration form not duly filled in contravenes Sections 50 and 51. The court stated that non-observance of the statutory requirement itself constitutes a contravention. The Tribunal's findings that the blank Column 6 could lead to the reuse of Form 38 for different transactions were upheld, thus justifying the imposition of penalty.

Conclusion:
The court dismissed the revisions, affirming the Tribunal's decision to impose penalties on the assessee. It concluded that the repeated non-filling of Column 6 of Form 38 demonstrated an intention to evade tax, thus satisfying the requirements for penalty under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008. All questions of law were answered against the assessee and in favor of the Revenue.

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