2016 (8) TMI 336 - HC - VAT and Sales Tax

Revision penalty intention to evade tax seizure the Form-31 filed had been taken by the assessee in the name of M/s. Chabra Brothers whereas the consignment itself was from one M/s. Aman Deep Trading Pvt Ltd., - Held that - The circumstance of the Form-31 having been applied in the name of a different trader than the one from whom the purchases were ultimately effected would not and could not have dispelled or upset the conclusion arrived. Hence no intention to evade tax revision allowed.

Summary

Issues involved:
Challenge to imposition of penalty under Section 15-A of the U.P. Trade Tax Act 1948 based on discrepancies in bill entry and Form-31 submission.

Analysis:
The case involved a challenge to the imposition of a penalty on the assessee under Section 15-A of the U.P. Trade Tax Act 1948 due to discrepancies in the entry of a bill and the submission of Form-31. The first appellate authority had set aside the penalty, finding no intent to evade tax, but the Tribunal overturned this decision. The Tribunal focused on the non-entry of particulars in Bill No. 400, leading to the penalty imposition. The revisionist contended that the Tribunal erred in interfering with the first appellate authority's decision, emphasizing that no intent to evade tax was present, as evidenced by the payment of concessional tax rates. The Tribunal's justification for the penalty was the failure to enter bill particulars, despite other consignments being duly recorded.

The High Court observed that the Tribunal did not consider whether the goods were accounted for in the books of accounts, primarily basing its decision on the discrepancy in Form-31. The Court agreed with the revisionist's argument that the Form-31 could have included multiple purchasers' names, and this discrepancy alone did not warrant the penalty. Citing a previous case, the Court emphasized that penalties should only be imposed when there is an intent to evade tax, not for inadvertent errors. The Court found that the Tribunal failed to establish intent to evade tax, as required by the statute, and thus allowed the revision, setting aside the Tribunal and assessing authority's orders.

In conclusion, the High Court allowed the revision, emphasizing that penalties should only be imposed when there is clear intent to evade tax, not for inadvertent errors or discrepancies. The Court set aside the Tribunal and assessing authority's orders, highlighting the importance of establishing intent before imposing penalties under tax laws.