VAT penalty requires statutory breach and intent to evade; batch-number mismatch alone is insufficient.

Penalty under the U.P. VAT Act is not sustainable for a mere mismatch between the batch number or date of manufacture shown in the invoice and the goods loaded, where the VAT rules do not require disclosure of those particulars. Liability under Section 48(5) depends on omission from accounts, wrong particulars, or improper accounting, together with an intention to evade tax. On the stated facts, the goods were otherwise accounted for, the same tax rate applied regardless of batch details, and no finding of intent to evade tax was recorded. The note also states that reliance on a seizure-based precedent was misplaced because it arose in a different statutory context.

---

---

Issues: Whether penalty under the U.P. VAT Act could be sustained on the basis of discrepancy between the batch number/date of manufacture shown in the tax invoice and the goods actually loaded, in the absence of any statutory requirement under the VAT regime to disclose such particulars and without proof of intention to evade tax.

Analysis: The liability to penalty under Section 48(5) of the U.P. VAT Act, 2008 is conditioned by the statutory phrases relating to omission from accounts, wrong particulars, or improper accounting, each operating with the further requirement of intention to evade payment of tax. Rule 44 of the U.P. VAT Rules does not require disclosure of batch number or date of manufacture in a tax invoice. The discrepancy complained of therefore did not amount to a breach of any VAT-based invoicing requirement, especially when the goods were otherwise accounted for and the same rate of tax applied irrespective of batch number or date of manufacture. The Tribunal also failed to record a finding of intent to evade tax, and its conclusion that the stock register was not properly maintained rested on conjecture rather than evidence. Reliance on the earlier decision concerning seizure of goods was misplaced because that decision arose in a different statutory setting and did not lay down that a batch-number discrepancy by itself justified penalty under the VAT Act.

Conclusion: The penalty was not legally sustainable and the assessee succeeded on the issue.

Final Conclusion: The revisions were allowed and the orders imposing and affirming penalty were set aside, with consequential refund of the deposited penalty amount.

Ratio Decidendi: Penalty under the VAT Act cannot be imposed merely because of a discrepancy in batch number or date of manufacture unless the discrepancy relates to a statutory requirement under the VAT law and is accompanied by a finding of intention to evade tax.

---