2021 (1) TMI 309 - HC - VAT and Sales Tax

Evasion of tax u/s 54(1)(14) of U.P. Value Added Tax Act - inadvertent mistake on his own part/the foreman of the firm under whom supervision the stickers containing the MRP of Premium Grade Tiles pasted in all boxes/cartoons even boxes/cartoons containing to Silver Grade Tiles and Gold Grade Tiles boxes loaded in the vehicle - purchasing dealer liable for mistakes and actions by the consignee - Whether there was an intention on the part of revisionist and under Section 54(1)(14) VAT Act it is mandatory to examine the material on record and discuses the merit of matter and record the clear finding with regard to intention whereas, there is no material on record in the order of assessing authority regarding the physical verification of each boxes/cartoons? HELD THAT - This Court finds from a perusal of the explanation given by the revisionist before the Assessing Officer and before the First Appellate Court that indeed the explanation differs before both the Authorities. The intention to evade tax is writ large as the transaction itself shows different valuation in invoice from the actual value of the goods being imported by the revisionist - this Court does not find any factual or legal infirmity in the order impugned. The Trade Tax Revision stands dismissed.

Summary

Issues:
1. Condonation of delay in filing Trade Tax Revision.
2. Allegations of under-valuation of goods and tax evasion.
3. Discrepancies in valuation of goods and intention to evade tax.

Analysis:
1. The Court considered an application for condonation of delay in filing the Trade Tax Revision due to the impact of COVID-19. The delay was attributed to the lockdown situation, and in line with a Supreme Court observation, the delay was condoned, treating the revision as filed in time.

2. The Trade Tax Revision involved a case where a dealer in Sanitary goods was accused of under-valuation of goods and tax evasion. The dealer had imported tiles with discrepancies in MRP markings, leading to suspicion of tax evasion. The taxing authority imposed a penalty under Section(1)(14) of U.P. Value Added Tax Act. The First Appellate Authority accepted the dealer's explanation, citing negligence on the part of the vendor in marking the tiles with a lower MRP. However, the Tribunal later allowed the appeal of the taxing authority, alleging collusion between the vendor and the dealer for tax evasion.

3. The Court examined the discrepancies in the valuation of goods and the intention to evade tax. The dealer argued that the discrepancies were due to the vendor's mistake in marking the MRP on the tiles. However, the State respondents contended that there was under-valuation with the intention of tax evasion, supported by differing explanations provided by the dealer to different taxing authorities. The Court upheld the Tribunal's decision, finding no legal or factual infirmity in the order, dismissing the Trade Tax Revision.

Overall, the judgment addressed the issues of delay condonation, under-valuation of goods, and intention to evade tax in a detailed manner, considering the explanations provided by the parties involved and the findings of the taxing authorities and the Tribunal.