Penalty under U.P. Trade Tax law failed where goods were duly accounted for and tax clearances were undisputed

Penalty under Section 15A(1)(o) of the U.P. Trade Tax Act was found unjustified because the assessee showed the seized goods were entered in its regular books of account at the place of business and had been cleared by the tax authorities in Bihar. The State did not dispute the authenticity of those tax clearances in its supplementary counter affidavit. As the factual foundation for invoking penalty was not established, the penalty was deleted.

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Issues: Whether penalty imposed under Section 15A(1)(o) of the U.P. Trade Tax Act was justified when the assessee showed that the goods were duly entered in its books of account at the place of registration and had been cleared by the tax authorities.

Analysis: The assessee produced material showing that the seized goods had been accounted for in the regular books of account at the place of business and had also been cleared by the tax authorities in Bihar. The State, in its supplementary counter affidavit, did not dispute the veracity of those tax clearances. On that basis, the factual foundation for the penalty was not made out.

Conclusion: The penalty under Section 15A(1)(o) was not justified and was deleted.

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