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2020 (3) TMI 822 - HC - VAT and Sales TaxImposition of penalty u/s 54(1)(14) of the U.P. Value Added Tax Act, 2008 - contravention of the provisions of Section 50 of the Act, 2008 - existence of mens rea or not - HELD THAT - Perusal sub Section 6 of Section 28A itself indicates that penalty can be imposed only after giving opportunity of being heard that the goods were being so transported in an attempt to evade payment of tax due or likely to be due under the Act and therefore mens rea becomes essential ingredient. Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to impose penalty under Section 54(1)(14) of the Act, 2008. In the present case, the vehicle was accompanied by Form 38 and all other documents were being carried along with other documents and only due to human error column would remain unfilled. It was the duty of the Officer managing the Check Post who after discovering that some column of Form 38 found unfilled should have filled the same himself in the light of Circular dated 03.02.2009 and should have allowed the vehicle to proceed alongwith the goods. It is undisputed that the goods transported were the same which were mentioned in the various documents (bill/builty/challan etc.) carried by the driver of the vehicle. Revision dismissed.
Issues Involved:
1. Legality of the penalty imposed under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008. 2. Interpretation of the requirement to fill all columns in Form 38. 3. Applicability of the judgment in M/s Guljag Industries Vs. Commercial Tax Officer. 4. Compliance with procedural requirements and the role of mens rea in imposing penalties. Issue-wise Detailed Analysis: 1. Legality of the penalty imposed under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008: The primary issue in this case revolves around the imposition of a penalty of ?16,34,000/- under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008. The penalty was imposed due to the non-filling of Column 6 in Form 38 by the assessee, which led to the apprehension of an intention to evade tax. The Tribunal had set aside the penalty, which was challenged by the revenue in this revision. 2. Interpretation of the requirement to fill all columns in Form 38: The court examined the statutory requirements under the Act, 2008, and the necessity of filling all columns in Form 38. It was noted that the declaration form for import (Form 38) must include details such as the name and address of the dealer, description of goods, weight/measure, quantity, value, bill/cash memo/challan/tax invoice number and date, and particulars of the transporter. The court acknowledged that recurring instances of leaving Column 6 blank could facilitate tax evasion by reusing the form for importing unaccounted goods. 3. Applicability of the judgment in M/s Guljag Industries Vs. Commercial Tax Officer: The revenue relied on the judgment in M/s Guljag Industries, where the Apex Court held that leaving relevant columns in forms blank while importing goods presumes an intention to evade tax. However, the court distinguished this case by noting that the facts and statutory provisions applicable in Uttar Pradesh were different. Specifically, the court highlighted that the penalty under Section 54(1)(14) of the Act, 2008, requires establishing mens rea, or a guilty mind, which was not a requirement in the M/s Guljag Industries case. 4. Compliance with procedural requirements and the role of mens rea in imposing penalties: The court emphasized that the imposition of a penalty under Section 54(1)(14) necessitates a finding of an intention to evade tax, which must be established after giving the dealer an opportunity to be heard. The court referred to previous judgments, including Jain Suddh Vanaspati Ltd. Vs. State of U.P. and I.C.I. India Limited Vs. Commissioner of Sales Tax, which underscored the importance of proving an attempt to evade tax rather than merely penalizing procedural defects. The court also cited a circular dated 03.02.2009, which directed officers to fill in any blank columns in Form 38 based on accompanying documents and release the goods. Conclusion: The court concluded that the penalty imposed by the Assessing Authority was unjustified as the non-filling of Column 6 was due to human error and there was no intention to evade tax. The Tribunal's finding that there was no intention to evade tax was upheld. The court affirmed the Tribunal's order and dismissed the revision, stating that no question of law arose for consideration. The judgment reinforces the principle that penalties under tax laws require proof of an intention to evade tax and cannot be imposed solely based on procedural lapses.
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