Documented goods and unlinked excess quantity cannot attract trade tax penalty without proof of contravention.

Penalty under the U.P. Trade Tax Act was held unsustainable where the consignment covered by bill, Form-31 and GR was supported by valid documents and no discrepancy was found. The documented goods could not attract penalty, and the separately found excess quantity also could not be visited with penalty because there was no finding that the assessee owned, transported, or caused release of those goods in contravention of the statutory transport requirement. In the absence of evidence of contravention and without the required inquiry linking the assessee to the extra goods, the levy was unjustified.

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Issues: Whether penalty under Section 15-A(1)(o) of the U.P. Trade Tax Act, 1948 was justified on the entire consignment, including the goods covered by valid documents and the separately found extra quantity, when there was no finding that the extra goods belonged to the assessee or were transported by it in contravention of Section 28-A.

Analysis: The goods covered by bill, Form-31 and GR were found to be supported by valid documents and no discrepancy or breach was noticed in relation to that portion of the consignment. Penalty could not, therefore, be imposed on the documented goods. As to the additional 2000 kg, the assessee consistently denied any connection with those goods, the seizure and security were confined to that excess quantity, and no finding was recorded that the assessee owned, transported, or got those goods released. In the absence of evidence of contravention and in view of the requirement of inquiry before penalty, the levy was unsustainable.

Conclusion: The penalty was not justified either on the documented goods or on the extra quantity, and the assessee succeeded.

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