Penalty for missing Form-31 at check post failed without proof of intention to evade tax.

Penalty for non-production of Form-31 at the entry check post was not sustainable because the record showed accompanying stock transfer documents, including the invoice, lorry receipt and Form D-3, evidencing movement of goods from the Haryana depot to the Ghaziabad depot. Although Section 15A(1)(o) of the U.P. Trade Tax Act could apply to a contravention, the material did not contain any finding of a conscious attempt to evade tax, which was necessary for seizure under Section 28A(6). In the absence of recorded intention to evade tax, the penalty could not be maintained merely on the basis of delayed production of Form-31, and the issue was decided in favour of the assessee.

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Issues: Whether penalty under Section 15A(1)(o) of the U.P. Trade Tax Act, 1948 could be sustained for non-production of Form-31 at the entry check post in the absence of any finding of intention to evade tax.

Analysis: The goods were accompanied by stock transfer documents, including the invoice, lorry receipt and Form D-3 issued under the Haryana law, all of which disclosed the movement of goods from the Haryana depot to the Ghaziabad depot. The record did not show that the non-production of Form-31 at the first instance was a conscious attempt to conceal the transaction. Penalty under Section 15A(1)(o) could be imposed for contravention, but seizure under Section 28A(6) required an intention to evade tax. In the absence of any recorded finding on intention to evade, and in view of the earlier decisions relied upon, the penalty could not be maintained merely because Form-31 was not produced at the check post.

Conclusion: The penalty was not justified and the issue was answered in favour of the assessee and against the revenue.

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