2014 (10) TMI 529 - HC - VAT and Sales Tax

Intent crucial for tax penalties! Tribunal decisions upheld except when evasion evident. Remand in one case.

The court emphasized the requirement to establish an intention to evade tax for imposing penalties under Section 54(1)(14) of the U.P. Value Added Tax ... Penalty u/s 54(1)(14) of UP VAT - import of goods into the State by road against a declaration form - contravention of the provisions of Section 50 - Held that:- Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to impose penalty under Section 54(1)(14) of the Act. If the last fact finding authority i.e. the tribunal has recorded a finding of fact that there was no intention to evade payment of tax, same cannot be interfered with in revision under Section 58 of the Act provided the finding is perverse or it is based on consideration of irrelevant material or non consideration of relevant material. Issues Involved:1. Whether the Commercial Tax Tribunal was legally justified in deleting the penalty levied under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008Rs.Issue-wise Detailed Analysis:1. Legal Provisions and Requirements:The case revolves around the interpretation and application of Section 54(1)(14) of the U.P. Value Added Tax Act, 2008, which pertains to the penalty for contravention of Section 50. Section 50 mandates that any person intending to import goods into the state must carry a duly filled declaration form (Form 38) along with other relevant documents. The failure to comply with this requirement can attract penalties.2. Legal Precedents and Interpretations:The court referenced several precedents to clarify the legal position:- In *Jain Suddh Vanaspati Ltd. Vs. State of U.P.*, it was established that the power to levy penalties is contingent on the intention to evade tax, not merely on the absence of requisite documents.- In *Multitex Filtration Engineering Ltd. Vs. Commissioner of Commercial Tax U.P.*, the court emphasized that non-filling of Column No. 6 in Form 38 could indicate an attempt to evade tax.- In *M/s Rama Pulses Vs. State of U.P.*, the court reiterated that mere contravention of Section 50 without the intention to evade tax does not justify penalties.3. Examination of Specific Cases:The judgment analyzed several cases where penalties were imposed due to non-filling of Column No. 6 in Form 38. The court examined whether there was an intention to evade tax in each case.- T.T.R. No. 441 of 2014: The tribunal found no intention to evade tax as the goods were duly accounted for in the books of account and accompanied by all relevant documents. The penalty was dismissed.- T.T.R. No. 442 of 2014: The tribunal concluded there was no intention to evade tax as the goods were accompanied by all necessary documents except for the incomplete Form 38. The penalty was dismissed.- T.T.R. No. 443 of 2014: The tribunal found no intention to evade tax, as the goods were excisable and accompanied by all relevant documents. The penalty was dismissed.- T.T.R. No. 455 of 2014: The tribunal found no intention to evade tax as the goods were accounted for and accompanied by relevant documents. The penalty was dismissed.- T.T.R. No. 467 of 2014: The tribunal found no intention to evade tax despite the incomplete Form 38, as the goods were accompanied by all other relevant documents. The penalty was dismissed.- T.T.R. No. 465 of 2014: The tribunal's finding of no intention to evade tax was overturned due to discrepancies in the documents, indicating a possible intention to evade tax. The matter was remanded for reconsideration.4. Conclusion and Legal Principles:The court concluded that the mere non-filling of Column No. 6 in Form 38 does not automatically justify the imposition of penalties under Section 54(1)(14). The intention to evade tax must be established based on the totality of evidence and circumstances. The tribunal's findings of fact regarding the intention to evade tax were generally upheld, except in cases where discrepancies in documents indicated otherwise.Summary:The judgment underscores the necessity of establishing an intention to evade tax for imposing penalties under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008. The court dismissed most revisions, upholding the tribunal's findings that there was no intention to evade tax, except in one case where the matter was remanded for reconsideration due to document discrepancies.