Tax invoice powers and trade mark transfer under VAT law: penal notice quashed for lack of statutory violation.

Transfer of the right to use a trade mark was treated as taxable goods under the U.P. Value Added Tax Act, and tax had been charged and deposited on the transaction. A registered selling dealer was therefore entitled to issue tax invoices under the statutory framework, and no violation of any provision was shown. On that basis, invocation of the penal power for issuing tax invoices was held unjustified, and the notice was quashed as without jurisdiction. The separate question of input tax credit was left open.

---

---

Issues: Whether the notice issued under Section 54(1)(11) of the U.P. Value Added Tax Act, 2008 for issuing tax invoices in relation to transfer of the right to use a trade mark was sustainable.

Analysis: The transfer of the right to use the trade mark was treated as taxable goods under Section 4(1)(a) of the U.P. Value Added Tax Act, 2008 read with Schedule II, and tax was charged and deposited on the transaction. Section 22(1) of the U.P. Value Added Tax Act, 2008 enabled a registered selling dealer to issue tax invoices in respect of taxable sales, and the petitioner had effected such a sale of taxable goods. Since the transaction was within the statutory tax framework and no violation of any provision was shown, invocation of the penal power under Section 54(1)(11) was not justified. The separate issue of input tax credit was left open.

Conclusion: The notice was without jurisdiction and was quashed.

---