2008 (1) TMI 833 - HC - VAT and Sales Tax

Trade Tax Tribunal decision upheld by High Court, penalty deleted for transport within State.

Commissioner, Trade Tax, UP. Versus Shakti Cement Agency

The High Court upheld the Trade Tax Tribunal's decision to delete the penalty imposed under section 13A(4) of the U.P. Trade Tax Act for the assessment ... - Issues:1. Interpretation of section 13A(4) of the U.P. Trade Tax Act, 1948 regarding imposition of penalty.2. Determination of liability for penalty based on the destination of goods and dealer's registration.3. Assessment of evidence to establish the proper destination of goods and applicability of penalty.Analysis:The High Court addressed the trade tax revision filed by the Commissioner against the Trade Tax Tribunal's judgment related to penalty proceedings under section 13A(4) of the Act for the assessment year 1995-96. The main issue raised was whether the Tribunal was justified in annulling the penalty despite incriminatory evidence. The case involved a truck carrying white cement, where discrepancies in the bill led to a show-cause notice to the dealer, Shakti Cement Agency. The assessing authority imposed a penalty, which was upheld by the Deputy Commissioner but later challenged in a second appeal before the Tribunal.The Tribunal found that the goods were being transported within the State of U.P. and not outside to Bihar, as initially claimed. Consequently, the penalty was deleted based on this finding. The Standing Counsel argued against this decision, emphasizing that incomplete documentation indicated the goods were destined for Bihar. Conversely, the dealer's counsel contended that for penalty imposition, it was crucial to establish that the goods did not pertain to the dealer or a registered dealer, which was not the case here. The dealer had acknowledged booking the goods for sale within U.P., and there was no evidence they were unaccounted for in the dealer's records.The Court agreed with the Tribunal's decision, noting that penalty under section 13A(4) required goods not related to a registered dealer or absent from the dealer's records. Since the goods were connected to the dealer and properly recorded, the penalty was unwarranted. The judgment emphasized that the liability for tax, whether under State or Central law, did not automatically translate to penalty imposition. Consequently, the Court dismissed the revision, finding no legal question meriting consideration.