2023 (1) TMI 504 - HC - VAT and Sales Tax

Penalty under Section 54(1)(14) of U.P.V.A.T. Act, 2008 - change in the quantum of penalty by rectification proceedings - revisionist submitted that the Assessing Authority has erred in law in passing the rectification order dated 26.12.2012 under Section 31 of the Act of 2008 after the order of the first Appellate Authority, as the order of the Assessing Authority merged in the order of the first Appellate Authority - HELD THAT - It is clear that the goods were intercepted by the mobile squad on 17.5.2010 while it was in transit. Form 38, which was being used for carrying the goods, only mentioned about two bills being Bill No.260 and 194 and not Bill No.195. The Taxing Authorities as well as Tribunal had categorically recorded findings that there was an intention to evade tax by the assessee as the third bill was deliberately not mentioned in From 38 and column was left blank - the first Appellate Authority had reduced the quantum of penalty imposed by the Assessing Authority and only penalty have been imposed on the goods which has been transported through the Bill No.195 and has not been entered in From - 38. The argument of learned counsel for the revisionist to the extent that order passed by the Assessing Authority under Section 48(5) of the Act of 2008 merged after the order passed by first Appellate Authority and no rectification order could have been passed under Section 31 has no legs to stand as the rectification proceedings are initiated for error apparent on the face of the order and the Assessing Authority has rightly proceeded to pass order and rectified its order. The nature of the penalty proceedings cannot be changed by rectification order under Section 31 of the Act and the penalty proceedings was rightly carried out against the assessee-revisionist as description of goods and Bill No.195 was not entered in Form -38 while the goods were in transit. There are no case for interference is made out - The revision being devoid of merit is hereby dismissed.

Summary

Issues:
1. Revision under Section 58 of the U.P. Value Added Tax Act, 2008 challenging the order of the Commercial Tax Tribunal.
2. Legality of confirming penalties under Sections 54(1)(14) and 48(5) of U.P.V.A.T. Act, 2008.
3. Rectification order passed by the Assessing Authority under Section 31 of the Act of 2008.

Analysis:
1. The revisionist challenged the order passed by the Commercial Tax Tribunal under Section 58 of the U.P. Value Added Tax Act, 2008. The Tribunal had rejected both the appeals filed by the assessee and the Revenue, leading to the present revision. The revisionist contended that the Assessing Authority erred in law by passing a rectification order under Section 31 of the Act after the first Appellate Authority's decision. The Tribunal found that there was an intention to evade tax as a bill was deliberately not mentioned in Form 38 during the transportation of goods.

2. The Assessing Authority initially imposed a penalty under Section 48(5) of the Act of 2008, which was later rectified to be under Section 54(1)(14). The first Appellate Authority reduced the penalty, but it was noted that the penalty was imposed only on goods transported through a bill not entered in Form 38. The Tribunal upheld the penalty proceedings against the revisionist, emphasizing the intentional omission of a bill in the transit form, indicating an attempt to evade tax. The rectification order was deemed valid as it corrected an error apparent on the face of the order, and the nature of penalty proceedings could not be altered through rectification.

3. The Tribunal concluded that there was no basis for interference, and the revision lacked merit, leading to its dismissal. The questions of law framed were answered against the assessee and in favor of the Revenue. The judgment highlighted the significance of accurate documentation in tax matters and upheld the penalty imposed for non-disclosure of a bill during the transportation of goods, emphasizing the importance of compliance with tax regulations to prevent tax evasion.