2018 (8) TMI 1492 - HC - VAT and Sales Tax

Penalty u/s 15-A(i)(c) of the U.P. Trade Tax Act, 1948 - sale through stock transfer or inter-state sales - Held that - It transpires that at the time of survey, which was held on 10.12.1996, Exhibit-15, was ceased in which the details of purchasers situated outside the State of U.P. were found mentioned. According to the department, since the details were known to the revisionist prior to movement of goods, therefore, the claim of the revisionist that it was the stock transfer cannot be accepted rather it was a inter-state sales. The revisionist-assessee has claimed the transaction against From-F as an exempted turnover / sales whereas from the record it is transpired that the transaction in question was deliberately concealed by claiming as an exempted turnover with ill intention - In view of the undisputed facts that the transaction in question was not the stock transfer as such was an inter-state sales, the entries and details of the purchasers was found in Exhibit 15, the claim of the revisionist is not acceptable that there was no intention on his part to evade the tax. The penalty proceedings under Section 15A(1)(c) of the Act were fully justified and there was no proper acceptable explanation is found - revision petition dismissed.

Issues:
1. Imposition of penalty under Section 15-A(i)(c) of the U.P. Trade Tax Act.
2. Jurisdiction of the assessing authority and legality of the order.
3. Justification of assessing authority's action in imposing penalty.
4. Proof of stock transfer and absence of concealment or evasion of tax.
5. Burden of proof on the department regarding turnover concealment.
6. Bona fide conduct of the revisionist and justification of penalty imposition.

Analysis:
Issue 1: The revisionist challenged the penalty order under Section 15-A(i)(c) of the U.P. Trade Tax Act, upheld by the Trade Tax Tribunal. The questions of law raised included the justification for penalty imposition in the case of an inter-State sale.

Issue 2: The assessing authority's jurisdiction and legality of the order were questioned by the revisionist, claiming that the authority failed to consider relevant evidence and wrongly imposed the penalty.

Issue 3: The revisionist contended that the assessing authority's action was unjustified as the turnover was disclosed in the books of account, and the penalty imposed was not warranted.

Issue 4: The revisionist argued that the transaction was a stock transfer, supported by entries in the books of account, and no incorrect information was provided. However, the assessing authority treated it as inter-State sales, leading to penalty imposition.

Issue 5: The department's burden of proving turnover concealment under Section 15-A(i)(c) was challenged by the revisionist, claiming that the assessing authority failed to discharge this burden adequately.

Issue 6: The revisionist asserted that there was no tax evasion, and the conduct was bona fide, with sales made through stock transfer to ex U.P. consignee agents. The penalty imposition was deemed unjustified based on the revisionist's arguments.

The High Court upheld the penalty imposition, rejecting the revisionist's arguments. The court found that during a survey, details of purchasers outside U.P. were found in the revisionist's records, indicating inter-State sales rather than stock transfers. The court noted that the revisionist's claim of stock transfer was not accepted due to the deliberate concealment of details. The tribunal and authorities found that the revisionist concealed turnover with ill intent to evade tax, justifying the penalty under Section 15-A(i)(c). The court confirmed the penalty imposition, dismissing the revision petition.

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