2019 (4) TMI 1327 - HC - VAT and Sales Tax

Imposition of penalty u/s 13A(4) of the U.P. Trade Tax Act - Goods seized on the ground that Mobile Squad Authorities presumed that goods in question are meant to be delivered at the address which is mentioned in the loose purchi - HELD THAT - Section 13A(4) of the Act provides that the penalty under the said provision can be imposed only when the goods were omitted from being shown in the account books, register and other documents referred to in Sub-Section 1 of Section 13 A of the Act. No other ground has been provided in Sub-Section 4 of Section 13A for imposing the penalty therein. The assessing authority of the revisionist has converted security in penalty imposed under Section 13A(4) of the Act - the order passed by the First Appellate Authority is affirmed - revision allowed.

Summary

Issues:
1. Penalty imposed under Section 13A(4) of the U.P. Trade Tax Act upheld by Tribunal for assessment year 2002-03.
2. Validity of penalty order under Section 13A(4) based on goods omitted from account books.
3. Appeal filed against penalty order by Joint Commissioner (Appeals).
4. Tribunal's modification of penalty amount from ?4,89,000 to ?3,26,000.
5. Lack of specific finding by Tribunal on the provision of Sub-Section 4 of Section 13A of the Act.
6. Dispute over stock transfer transactions under Central Sales Tax Act.
7. Discrepancy in assessing authority's acceptance of stock transfers and estimation of skimmed milk powder sale.

Analysis:
1. The revisionist, a registered company engaged in food product manufacturing, faced penalty under Section 13A(4) of the U.P. Trade Tax Act for goods omitted from account books. The Tribunal upheld the penalty for the assessment year 2002-03.
2. The penalty order was based on the presumption that goods were not accounted for, leading to seizure and penalty conversion by the assessing authority. However, the Joint Commissioner (Appeals) set aside the penalty, citing compliance with Section 13A(4) as goods were duly accounted for in the regular books of account.
3. Subsequently, the Commissioner Trade Tax appealed to the Tribunal, which reduced the penalty from ?4,89,000 to ?3,26,000. The revisionist argued that the Tribunal failed to address the mandatory requirement of Sub-Section 4 of Section 13A for imposing the penalty solely based on omitted goods.
4. Another legal issue arose regarding stock transfer transactions under the Central Sales Tax Act, with discrepancies in assessing the validity of these transactions and the estimation of skimmed milk powder sales by the assessing authority, later confirmed by the Tribunal.
5. Notably, a separate revision related to the Tribunal's order was dismissed by the High Court, affirming the First Appellate Authority's decision and setting aside the Tribunal's judgment on the penalty matter.

This detailed analysis outlines the legal complexities surrounding the penalty imposition, appeal process, and stock transfer disputes, highlighting the key arguments and decisions made at each stage of the judicial proceedings.