2019 (8) TMI 1158 - HC - VAT and Sales Tax

Imposition of penalty u/s 13 A (4) of the U.P. Trade Tax Act - dismissal of second appeal filed by the assessee, after upholding the imposition of penalty under Section 13-A (4) of the Act - HELD THAT - While learned counsel for the assessee has vehemently urged that present is a case of bona fide dispute or inadvertent mistake and not deliberate conduct offered by the assessee, however, in view of the concurrent finding returned by the authorities and Tribunal, it is difficult to accept the submission, inasmuch as, the goods in question had been detained from the assessee himself in his capacity as a proprietor of the firm Absence of proper explanation at that stage with respect to absence of challan or bill or other documents and the further fact that the said documents were not produced before the seizing authority, immediately or within a reasonable time, in the context of seizure of jewellery in excess of 1 kg. in weight, it appears that the finding recorded by the authority below are proper and that the further explanation submitted latter was an afterthought. Revision dismissed.

Summary

Issues:
1. Imposition of penalty under Section 13-A (4) of the U.P. Trade Tax Act.
2. Allowance of the Commissioner's appeal without reversing the findings of the Appellate Authority.

Analysis:

Issue 1: Imposition of Penalty under Section 13-A (4) of the U.P. Trade Tax Act
The revisionist-applicant challenged the order of the Trade Tax Tribunal, Meerut, which upheld the penalty imposed under Section 13-A (4) of the U.P. Trade Tax Act 1948. The case involved a trader in jewellery who dispatched goods without proper documentation, leading to their interception during transportation. Despite explanations provided later, the authorities found the lack of proper documentation suspicious, especially the absence of a challan or bill accompanying the goods. The assessee's defense, including the claim of inadvertent mistake, was not accepted due to the absence of a satisfactory explanation at the time of seizure. The Tribunal concurred with the authorities, emphasizing the importance of immediate production of required documents in such cases. The court affirmed the concurrent findings against the assessee, dismissing the revision.

Issue 2: Allowance of Commissioner's Appeal
The second issue pertained to whether the Tribunal was correct in allowing the Commissioner's appeal without reversing the findings of the Appellate Authority. The Tribunal's decision to sustain the penalty against the applicant was challenged on the grounds of procedural irregularity. The questions of law raised in this regard were answered in favor of the revenue and against the assessee. The court upheld the Tribunal's decision, emphasizing the importance of providing proper documentation and explanations at the time of seizure to avoid penalties under the Trade Tax Act. The revision was ultimately dismissed, affirming the imposition of the penalty under Section 13-A (4) of the Act.

In conclusion, the judgment by the Allahabad High Court upheld the penalty imposed under Section 13-A (4) of the U.P. Trade Tax Act against the trader in jewellery, emphasizing the need for proper documentation and immediate explanation during goods interception. The court dismissed the revision, supporting the concurrent findings of the authorities and the Tribunal, and answered the questions of law in favor of the revenue.