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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the penalty imposed under section 4B(5) of the U.P. Trade Tax Act, 1948 was justified when the assessee claimed that the goods sold were damaged raw material and not the goods purchased for use in manufacture.
Analysis: The assessee had purchased soda ash at a concessional rate under a recognition certificate for use in manufacturing glass goods, but failed to establish by evidence that the quantity sold was actually damaged soda ash. In the absence of proof that the goods sold had lost their character as the purchased raw material, the finding that the assessee sold soda ash in breach of the certificate conditions was upheld. The record contained no material to show that the department had been informed of any damage or that the sold goods were different from the purchased goods in a legally relevant sense.
Conclusion: The penalty under section 4B(5) was rightly sustained and the issue is decided against the assessee and in favour of the Revenue.
Final Conclusion: The revision failed because the assessee did not discharge the burden of proving that the sale was only of damaged goods, and the penalty for contravention of the concessional purchase conditions stood affirmed.
Ratio Decidendi: A dealer claiming that goods purchased at concessional rate were later sold only because they became damaged must prove that fact by evidence; failing such proof, sale of the goods amounts to contravention of the conditions attracting penalty under the relevant provision.
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