2020 (2) TMI 303 - HC - VAT and Sales Tax

Imposition of penalty u/s 54(1)(14) of the U.P. Value Added Tax Act, 2008 - it is alleged that on inspection of the vehicle no papers were produced despite the fact that goods were being imported from outside the State and that the goods were destined for Lucknow were found to be on a different location from the route from Jamshedpur (Jharkhand) to Lucknow (U.P.) - HELD THAT - There is always apprehension that in absence of relevant documents the goods can be sold to unregistered dealers and thereby transaction would not be recorded in the books of account and the tax due would also be evaded. As per provisions contained in Section 50 of the Act, 2008, provides for penalty to stem the evasion of tax and to see that all the transactions are duly recorded in the books of account of the assessee which can subsequently be looked into by the taxing authorities. In the present case, the Tribunal being last fact finding authority has considered the submissions made by the revisionist as well the documents produced before them. The Tribunal after considering the entire facts and circumstances of the case has given cogent reasons for not accepting the version of the revisionist. The Tribunal has rejected the revision after duly considering all the relevant facts and pleas raised by the assessee. No ground exist for interference with the order of the Tribunal and no question of law arises for determination by this Court - Revision dismissed.

Summary

Issues:
Assessment of penalty under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 for transportation of goods without proper documentation and diversion from the intended route.

Detailed Analysis:
The judgment involves the revisionist challenging the penalty imposed under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 for the transportation of goods without proper documentation and diversion from the intended route. The revisionist, a registered dealer, received a purchase order for Iron Rods from a firm in Allahabad and placed an order with a manufacturer in Jharkhand. The goods were dispatched with necessary documents, but the vehicle carrying the goods was detained in Allahabad due to lack of proper papers. The revisionist's explanation of diverting the vehicle to Allahabad to fulfill an order was not accepted by the authorities. The first Appellate Authority and the Tribunal upheld the penalty, considering the lack of documentation and diversion from the intended route as grounds for tax evasion suspicion.

The Tribunal found that the documents produced by the revisionist after the detention seemed prepared subsequently, raising doubts about the authenticity. The Tribunal also noted discrepancies in the documentation regarding the intended route of the goods. Despite the goods being released on deposit of security, they were not supplied to the intended party, further confirming tax evasion suspicions. The Tribunal concluded that the penalty imposed on the revisionist was just and reasonable under Section 54(1)(14) of the Act, 2008.

The learned Standing Counsel supported the authorities' decisions, emphasizing the importance of proper documentation to prevent tax evasion. The absence of relevant documents raised concerns about potential sales to unregistered dealers and unrecorded transactions. Section 50 of the Act, 2008 provides for penalties to deter tax evasion and ensure accurate recording of transactions for tax assessment purposes.

The Tribunal, as the final fact-finding authority, thoroughly considered the revisionist's submissions and documents before rejecting the revision. The Court, upon reviewing the case, found no valid reason for the lack of proper documentation or the diversion from the intended route. The discrepancies in the documents and the diversion of the vehicle to Allahabad instead of the intended destination raised legitimate tax evasion concerns, justifying the penalty imposed.

Ultimately, the Court dismissed the revisions, affirming the Tribunal's decision as well-founded and devoid of merit. No legal question arose for further consideration, concluding the judgment on the penalty assessment under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008.