Incomplete declaration form and intent to evade tax justify VAT penalty despite reliance on an inapplicable circular.

Penalty under the U.P. VAT Act was sustained where the declaration form for inter-State movement of goods was materially incomplete, with key invoice particulars left blank. The incomplete form was treated as capable of reuse and misuse, supporting a finding of intent to evade tax on the material before the authorities and Tribunal. The circular relied on by the dealer was confined to import from outside India and did not govern movement from one State to another, especially in light of the later clarification. The revision was therefore rejected and no interference was warranted.

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Issues: Whether penalty under Section 54(1)(14) of the U.P. VAT Act, 2008 was justified for carriage of goods with an incomplete Form-38, and whether the Circular dated 03.02.2009 protected the revisionist from penalty.

Analysis: The goods were imported from outside the country, delivered at Delhi, and then transported into Uttar Pradesh. The mandatory declaration form under Section 50 of the U.P. VAT Act, 2008 was found incomplete, with crucial columns such as the invoice or bill particulars left blank. The incomplete form was held capable of misuse for reuse in other consignments, thereby supporting an inference of intent to evade tax. The authorities and the Tribunal had concurrently recorded this finding on the basis of material on record. The Circular dated 03.02.2009 was held applicable only to import from outside the territory of India and not to movement from one State to another within India, especially after clarification by the subsequent Circular dated 03.06.2009.

Conclusion: The penalty under Section 54(1)(14) of the U.P. VAT Act, 2008 was upheld and no interference was warranted in revision.

Ratio Decidendi: Where the prescribed declaration form for import into the State is materially incomplete and the authorities record a reasoned finding of intent to evade tax, penalty is sustainable notwithstanding the plea that the goods were otherwise not taxable or that a general circular applies to a different factual situation.

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