2019 (7) TMI 1138 - HC - VAT and Sales Tax

Penalty u/s 15-A (1) (o) of the U.P. Trade Tax Act, 1948 - intent to evade any liability of tax or not - HELD THAT - What is required to be seen is that there should be an intention to evade tax and mere a technical omission or violation of law would not empower the authority to impose penalty. In the present case also, since there is only a technical defect of non-submission of form, while the entire transactions are reflected in the book of accounts submitted by the revisionist voluntarily to the department during his assessment proceedings, it can be safely inferred that there was no intention to evade liability of tax. Thus, the revisionist could not be made liable for any penalty. Revision allowed - decided in favor of revisionist.

Summary

Issues:
Challenge to penalty imposed under Section 15-A (1) (o) of the U.P. Trade Tax Act, 1948 for non-submission of required form for imported goods.

Analysis:
The revisionist challenged the penalty imposed for not submitting the required form for imported goods, arguing that there was no intent to evade tax as the amount was duly declared in the business books. Citing the case of M/s.Hindustan Steel Ltd. Vs. State of Orissa, it was emphasized that penalty should not be imposed unless there is deliberate defiance of law or contumacious conduct. The judgment highlighted that penalty should not be imposed for technical breaches or when the offender believed they were not liable to act as per the statute. Similarly, in the case of M/s. Gulmarg Chemicals & Scientific Works, Aligarh, the court held that a technical omission due to lack of knowledge or negligence, without intent to evade tax, does not justify penalty imposition.

The court, after considering the facts and circumstances, concluded that the non-submission of the form was a technical defect, not indicative of an intent to evade tax. The revisionist had voluntarily submitted all transactions in the account books during assessment proceedings, indicating transparency. The judgment emphasized that a mere technical omission or violation of law does not warrant penalty imposition if there is no intent to evade tax. The court ruled in favor of the revisionist, setting aside the Tribunal's order imposing the penalty, as there was no evidence of deliberate evasion and the transactions were duly recorded in the business books submitted to the department during assessment proceedings.