2014 (7) TMI 1321 - HC - VAT and Sales Tax

Penalty u/s 54 (1)(14) of the U.P. VAT Act, 2008 - imposition of penalty on the ground that on road checking truck, 948 pieces of timber were found being imported by the respondents and on verification, weight of goods was found excess - AO was of the view that quality of the goods was also different - HELD THAT - The First Appellate Authority as well as the Tribunal have recorded findings of fact that the goods were not found in excess and it was covered by proper and genuine documents. Neither the assessing officer nor the inspecting officer have got examined the quality of goods from an expert nor have physically verified the goods after unloading them. No description was recorded with regard to the alleged difference in goods. On these facts, both the Appellate Authorities have recorded findings of fact. They have also recorded finding of fact that goods are properly accounted for in the books of account and there was no intention to evade payment of tax. There are no infirmity in the findings recorded in the impugned order of the Tribunal to uphold the order of First Appellate Authority - revision dismissed.

Summary

Issues: Penalty under Section 54 (1)(14) of the U.P. VAT Act, 2008 for excess weight and alleged difference in goods found during road checking.

The judgment involves a penalty imposed under Section 54 (1)(14) of the U.P. VAT Act, 2008 for the Assessment Year 2010-11 based on goods found during a road checking. The assessing officer imposed a penalty of Rs. 1,60,000 on the grounds that 948 pieces of timber were found in excess weight and with alleged differences in quality in a truck. The respondent appealed to the Additional Commissioner Grade-2 (Appeal)-2nd, Commercial Tax, Muradabad, who allowed the appeal stating that the goods were covered by proper documents and accounted for in the books, indicating no intention to evade tax. The assessing officer and inspecting officers did not physically verify the goods or examine them by an expert. The First Appellate Authority and the Tribunal both found no excess weight or differences in goods, with proper documentation and no intention to evade tax. The Tribunal's order was upheld as no legal issues arose, leading to the dismissal of the revision.

In this case, the primary issue revolved around the imposition of a penalty under the U.P. VAT Act, 2008 for alleged discrepancies in goods found during a road checking. The assessing officer's decision to impose a penalty was based on the excess weight and alleged differences in quality of the goods found in a truck during inspection. However, the First Appellate Authority and the Tribunal both found that the goods were properly documented, accounted for in the books, and there was no intention to evade tax. They also noted that the assessing officer and inspecting officers did not physically verify the goods or seek expert examination, leading to findings in favor of the respondent. The lack of physical verification and expert examination played a crucial role in the appellate authorities' decisions to overturn the penalty imposed by the assessing officer.

The judgment highlights the importance of proper documentation and accounting practices in tax-related matters. The respondent's appeal was successful as the goods in question were found to be covered by genuine documents and accounted for appropriately. The absence of physical verification and expert examination by the assessing officer and inspecting officers raised doubts about the initial penalty imposition. The Tribunal's decision to reject the appeal and uphold the findings of the First Appellate Authority was based on the factual determinations regarding the goods and the absence of any intention to evade tax. The legal significance of maintaining accurate records and conducting thorough verifications in tax assessments is underscored in this case, emphasizing the need for a diligent and comprehensive approach in such matters to avoid unnecessary penalties and disputes.