Form 31 for goods entry cannot by itself justify penalty absent a finding of sale in Uttar Pradesh.

Penalty for transporting a consignment of raddi without Form 31 could not be sustained unless there was a finding that the goods were sold in Uttar Pradesh. Form 31 regulates entry of goods from outside the State and does not itself authorise sales tax or penalty absent proof of sale. Because the Tribunal had not examined whether the raddi was sold in Uttar Pradesh or used in the factory as raw material for craft paper, the matter required reconsideration on that factual issue.

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Issues: Whether penalty could be sustained merely because one consignment of raddi was transported without Form 31, without a finding that the goods were sold in Uttar Pradesh.

Analysis: The assessee used the raddi as raw material in manufacturing craft paper. Form 31 serves to regulate entry of goods from outside Uttar Pradesh and does not by itself authorise levy of sales tax or penalty in the absence of an actual sale. The Tribunal had not examined whether the disputed raddi was sold in Uttar Pradesh or used in the factory as raw material.

Conclusion: The penalty order was not sustainable on the existing findings and the matter had to be reconsidered on the question of sale or user as raw material.

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