2020 (1) TMI 753 - HC - VAT and Sales Tax

Imposition of penalty U/s 10-A read with Section 10(b) of the Central Sales Tax Act - quantum of penalty - addition/amendment with regard to the items required to be imported by the revisionist - amendment in the registration certificate. HELD THAT - The admitted facts of this case are that the revisionist had moved an application for adding of Branch of his firm and also for addition of items. The competent authority had only added the Branch but no order was passed with regard to addition of the items. It is true that Form-C was issued in respect to the items to be imported, which did not find mention in the certificate of registration and the revisionist is claiming that the said goods were imported under the bona-fide belief that the goods have been included in the amended certificate of registration - It is also uncontroverted that application regarding addition of items was not allowed nor were the items entered on the certificate of registration. Without addition of items in the registration certificate, it is not permissible for the revisionist to import the goods and in case such goods which are not included in the certificate of registration are imported, same would amount to penalty under the provisions of the Central Sales Tax Act. In the instant case, the assessee despite coming to know that the goods/items have not been included in the list, he did not moved any application for disposal of pending application or moved a fresh application for including the goods in the certificate of registration - The revisionist in the present case was fully aware of the amendments incorporated in his certificate of registration and from the list of items appended therein, he should have been aware of the fact that his application for addition of goods had not been allowed and this the items had not been included in the list of goods he intends to import on Form C. This Court is of the considered opinion that there is no illegality or infirmity in the order of the Tribunal and therefore no interference in the same is required - Revision dismissed.

Summary

Issues:
Challenge to judgment and order dated 24th July, 2006 by Trade Tax Tribunal for assessment years 2001-02 and 2002-03 - Penalty under Section 10-A of the Central Sales Tax Act - Addition of items in registration certificate - Bonafide belief of revisionist in importing goods - Quantum of penalty imposed.

Analysis:
The revisionist, a firm engaged in buying and selling goods, moved an application for amending its registration certificates under the U.P. Trade Tax Act and the Central Sales Tax Act to include a branch office and additional items. However, only the branch was added, and not the items. The revisionist imported machinery without the items being included in the registration certificate, leading to a penalty notice for unauthorized import. The revisionist contended that the application for adding items was pending, and they believed they were authorized to import the goods. The Assessing Authority imposed a penalty under Section 10-A of the Central Sales Tax Act, which was upheld by the Joint Commissioner and the Trade Tax Tribunal.

The key issue revolved around whether the revisionist was liable for penalty under Section 10-A of the Central Sales Tax Act and if the quantum of penalty was excessive. The revisionist argued they acted in good faith, while the Revenue contended that the goods were imported without being included in the registration certificate, constituting a violation of statutory provisions. The Court examined the facts and legal precedents, particularly the burden of proof on the revenue to establish deliberate defiance of the law for penalty imposition.

The Court noted that the revisionist continued importing goods despite knowing they were not included in the registration certificate. Drawing from a Supreme Court judgment, the Court emphasized the importance of mens rea for penalty imposition under Section 10-A. It was highlighted that the revisionist failed to rectify the situation by amending the registration certificate after realizing the error, indicating a lack of bonafide intentions.

Ultimately, the Court found no illegality in the Tribunal's order and dismissed the revisions. The substantial questions of law were answered in favor of the Revenue, emphasizing the revisionist's awareness of the registration certificate's contents and the lack of genuine belief in importing the goods.