False declaration form penalty attaches on unlawful issuance itself, without proof of actual revenue loss.

Issuance of a false declaration form by an exempted dealer attracted penalty under section 15A(1)(l) of the U.P. Sales Tax Act, 1948, because the dealer was not competent to issue form III-C(2) and the false form could enable an unwarranted tax benefit. The Tribunal's view that penalty could not stand absent actual revenue loss was unsustainable, since liability arose on the unlawful issuance itself and did not depend on proof that loss had already materialised. The penalty was therefore rightly attracted and the deletion of penalty was erroneous in law.

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Issues: Whether the Sales Tax Tribunal was justified in setting aside the penalty imposed under section 15A(1)(l) of the U.P. Sales Tax Act, 1948, despite the dealer having issued false form III-C(2) to purchasers.

Analysis: The dealer was an exempted unit and, therefore, was not competent to issue form III-C(2) to purchasers. Issuance of such a false form would have enabled the purchasers to claim an unwarranted tax benefit and would have facilitated evasion of sales tax. The Tribunal itself accepted that the conduct attracted penalty under the statute, but it still interfered on the ground that the department had not actually suffered loss. That approach was unsustainable, because the legality of the penalty did not depend on whether the false declaration was detected before the revenue loss materialised. Once the false form was issued, the statutory condition for penalty stood attracted.

Conclusion: The penalty under section 15A(1)(l) was rightly attracted, and the Tribunal erred in law in deleting it. The issue is answered in favour of the Revenue.

Ratio Decidendi: Where the statute prescribes penalty for issuance of a false declaration form, the penalty is attracted on the unlawful issuance itself and does not depend on proof of actual revenue loss.

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