2024 (1) TMI 1113 - HC - VAT and Sales Tax

Levy of penalty u/s 54(1) (14) of the U.P. VAT Act - Form- 38 was not downloaded and printed from the official website but has been taken as screenshot - HELD THAT - From perusal of the record, it reveals that earlier also, screenshots were taken of the Form- 38 from the website of the department and three forms were submitted with the department to which no objection were raised, but in the case in hand, the goods were in question were intercepted at Kanpur and penalty proceedings were initiated against the revisionist. Since, earlier four Forms bearing No.00015116, 00015118 00015119 were submitted to which no objection was raised about the intention of the revisionist to evade the tax, it is clear that the revisionist was no intention to evade the payment of tax to the State Government. Further, there is no specific finding recorded by the authorities which shows the intention of the revisionist to evade the tax. This Court in the case of Protein Impax Pvt. Ltd. Ghaziabad 2022 (3) TMI 859 - ALLAHABAD HIGH COURT has held that in absence of any cogent finding as to intention to evade tax, levy of penalty under Section 54(1) (14) of the Act, is unsustainable. Earlier on three occasions, the department has accepted Form-38, which was taken as screenshot, without raising any objection, hence in the present case, it cannot be attributed any intention of the revisionist to evade from paying the tax. The question of law is answered in favour of the revisionist and against the opposite party - the revision is Allowed.

Summary

Issues Involved:
The judgment involves the assessment of penalty under Section 54(1) (14) of the U.P. VAT Act by the Commercial Tax Tribunal, Bench-I, Lucknow, based on the seizure of goods accompanied by Form-38 taken as a screenshot instead of being downloaded from the official website of the Commercial Tax Department. The primary issue is whether the penalty imposed on the revisionist for this discrepancy is justified.

Summary:
The revisionist, a registered dealer with a factory in Sonipat, Haryana, imported goods to U.P. accompanied by all necessary documents except Form-38, which was taken as a screenshot due to lack of awareness about the new system for downloading. The seizure of goods and initiation of penalty proceedings were based on this discrepancy, despite no prior objections to other screenshot submissions. The revisionist argued lack of intention to evade tax, citing previous judgments where the absence of such intent rendered penalties unsustainable.

The revisionist's counsel contended that the goods were legitimately transferred from Haryana to Lucknow for stock purposes, emphasizing the absence of discrepancies in goods quality or quantity. Conversely, the Standing Counsel argued that the delay in recording the interception of goods indicated an intent to evade tax, asserting that the revisionist's intention was clear.

The Court examined the case, noting that the revisionist's actions were consistent with past practices where screenshot submissions were accepted without issue. The lack of specific findings indicating an intent to evade tax led the Court to conclude that the penalty under Section 54(1) (14) was unsustainable. The judgment referenced previous cases to support this interpretation, ultimately allowing the revision and directing the release of any previously deposited penalties.

Therefore, the Court ruled in favor of the revisionist, highlighting the absence of evidence supporting an intent to evade tax and emphasizing the unsustainable nature of the penalty imposed.