2018 (12) TMI 1415 - HC - VAT and Sales Tax

Imposition of penalty u/s 54(1)(15)(i) of UPVAT Act, 2008 - absence of Transit Declaration Form - absence of documents referred to under Section 52 - failure of the assessee to establish that the goods were meant for delivery outside the State - It was the case of the revenue that though the goods had been detained and the truck along with goods parked inside Police Station Mathura Refinery, Mathura, the driver of the truck, without being permitted, drove away the truck. Held that - While the conduct of the driver of the truck, as alleged by the revenue, even if is found to be true, may result in other penalties including one under Section 54 (1)(22) of the Act, however, in face of evidence that the goods were meant for being transported from outside the State of Uttar Pradesh to outside State of Uttar Pradesh, no penalty may arise merely because of that conduct offered by the driver of the truck - at present, it is seen that at the stage of detention of goods itself, the assessee had disclosed the exact value and quantity of goods along with details of the seller and the purchaser both of whom were located outside the State of Uttar Pradesh. The documents that were produced by the assessee by way of proof to disbelieve the allegation of transaction again pertains to same two dealer, with respect to the same commodity and quantity of the goods. In the first place, the assessee appears to have discharged the burden cast on him to prove that the goods were transported from outside the State of Uttar Pradesh and that they had actually been delivered outside the State, as disclosed in the tax invoice. On the other hand, the revenue has failed to lead any evidence to prove the charge under Section 54(1)(15)(i) of the Act. In view of the fact that no such evidence was led, the imposition of penalty has wrongly been upheld - decided in favor of the assessee and against the revenue.

Summary

Issues:
Challenge to penalty imposed under Section 54(1)(15)(i) of the Uttar Pradesh Value Added Tax Act, 2008 based on absence of Transit Declaration Form and failure to establish goods were meant for delivery outside the State.

Detailed Analysis:

1. Facts and Allegations:
The revision was filed against the Commercial Tax Tribunal's order imposing a penalty under Section 54(1)(15) of the Act. The truck owned by the assessee was detained during transportation of goods, leading to the penalty notice. The goods were found loaded with "Moong Daal" meant for delivery to a dealer outside Uttar Pradesh.

2. Legal Provisions and Allegations:
The penalty was imposed under Section 54(1)(15)(i) of the Act, which requires the failure to carry specific documents and prove goods were meant for delivery outside the State. The penalty amount is linked to the tax payable on the value of goods or 40% of the value, whichever is higher.

3. Assessee's Defense:
The assessee argued that despite the absence of the Transit Declaration Form (TDF), other necessary documents were present, and the goods were indeed meant for delivery outside the State. The omission of TDF was accidental, not intentional. The assessee provided evidence to establish the goods' intended delivery outside Uttar Pradesh.

4. Tribunal's Decision and Disregard of Evidence:
The Tribunal upheld the penalty, disregarding the assessee's evidence based on a common interest between the dealer and the assessee. However, no positive evidence was presented by the revenue to refute the delivery outside the State or prove the goods were sold within Uttar Pradesh.

5. Burden of Proof and Lack of Evidence:
The burden lay on the revenue to prove the penalty charge under Section 54(1)(15)(i) of the Act. As the revenue failed to provide evidence against the assessee's claims of goods delivery outside the State, the imposition of the penalty was deemed unjustified.

6. Judgment and Conclusion:
The Court found that the essential facts for imposing the penalty were not established by the revenue. As the burden of proof was not met, the penalty imposition was overturned in favor of the assessee. The revision was allowed, and the Tribunal's order was set aside, with any deposited amount for the penalty to be released to the assessee.