2015 (1) TMI 724 - HC - VAT and Sales Tax

Deletion of penalty - Goods not in conformity with the document as well as Transit Declaration Form produced by the dealer/opposite party before the seizing authority or not - Transaction in contravention with the provision of the Act with an intention to evade tax or not - Whether the Commercial Tax Tribunal was legally justified in setting aside the penalty order passed u/d 54(1)(14) of the U.P. Value Added Tax Act Held that - Four trucks was intercepted on 19.8.2013 and three trucks were intercepted on 1.9.2014 - These trucks were found accompanied with challan of the respondent and invoices of different alleged firms of Delhi - on verification, all the firms of Delhi were found non-existent - on physical verification, the goods loaded in the respective trucks were found different from those mentioned in the alleged invoices or the challans - number of discrepancies were found are also recorded in the respective penalty order - The Tribunal has completely overlooked all the documentary evidences as well as the findings recorded by the assessing authority and the first appellate authority - the findings recorded by the Tribunal that the goods actually reached outside the State of U.P. and that the respondent is merely a transporter, appears to be perverse and without consideration to the relevant evidences and materials on record - The Tribunal should have considered each and every evidence which are on record and thereafter should have recorded its findings - failure of the Tribunal to do so renders the impugned order to be unsustainable thus, the order of the Tribunal is set aside and the matter is remitted back to the Tribunal for fresh consideration Decided in favour of revisionist revenue.

Issues Involved:
- Legality of the penalty order under Section 54(1)(14) of the U.P. Value Added Tax Act.
- Justification of the Commercial Tax Tribunal in setting aside the penalty orders.
- Evaluation of discrepancies in goods and documents.
- Determination of whether the respondent is merely a transporter or a dealer.
- Proof of delivery of goods outside the State of U.P.

Issue-wise Detailed Analysis:

1. Legality of the Penalty Order under Section 54(1)(14) of the U.P. Value Added Tax Act:
The primary issue was whether the penalty order under Section 54(1)(14) of the U.P. Value Added Tax Act was justified. The penalty was imposed because the goods found in the trucks did not match the accompanying documents and Transit Declaration Form (TDF). The assessing authority found discrepancies in the number of goods, their quality, and the existence of the firms mentioned in the invoices. The respondent failed to produce copies of Form-C and payment details, leading to the conclusion that the goods were intended to evade tax.

2. Justification of the Commercial Tax Tribunal in Setting Aside the Penalty Orders:
The Commercial Tax Tribunal set aside the penalty orders on the grounds that the respondent was merely a transporter and had discharged the burden of proof by submitting information uploaded on the Uttarakhand State website in Form-16. The Tribunal's decision was based on the assumption that the uploaded information was sufficient proof that the goods had reached outside the State of U.P.

3. Evaluation of Discrepancies in Goods and Documents:
The trucks intercepted on different dates were found with discrepancies in the goods loaded compared to the invoices and challans. The goods were either found in different quantities or were entirely different from those mentioned in the documents. Additionally, the firms from Delhi, whose invoices were found with the goods, were non-existent. The Form-16 of Uttarakhand State was found blank, and no payment details were submitted by the respondent.

4. Determination of Whether the Respondent is Merely a Transporter or a Dealer:
The Tribunal concluded that the respondent was merely a transporter and not a dealer. However, the High Court found this conclusion to be perverse, as the respondent's challans were found with the goods, and the alleged dealers were non-existent. The Tribunal overlooked the fact that the respondent could not produce any payment details or copies of Form-C, which were crucial to proving the genuineness of the transactions.

5. Proof of Delivery of Goods Outside the State of U.P.:
The only evidence provided by the respondent to prove that the goods were delivered outside the State of U.P. was the information uploaded on the Uttarakhand State website in Form-16. The High Court held that this alone could not be treated as sufficient proof, especially when no payment details or Form-C copies were provided. The Tribunal failed to consider the significant discrepancies and the non-existence of the alleged dealers.

Conclusion:
The High Court found that the Tribunal's findings were perverse and not based on a thorough consideration of the evidence. The Tribunal's reliance solely on the uploaded Form-16 information was insufficient to prove that the goods had reached outside the State of U.P. The High Court set aside the Tribunal's orders and remanded the cases back to the Tribunal for fresh consideration, directing it to provide a reasoned order after considering all the evidence and materials on record. The revisions were allowed, and the question of law was answered in favor of the applicant and against the assessee.

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