2019 (11) TMI 823 - HC - VAT and Sales Tax

High Court rules penalty under U.P. Trade Tax Act unjustified without discrepancies in physical verification

The High Court of Allahabad disposed of the revision filed against the penalty imposed under Section 13-A(4) of the U.P. Trade Tax Act, 1948. The Court ... Imposition of penalty u/s 13-A(4) of the U.P. Trade Tax Act, 1948 - overwriting on Form 49 - discrepancy noted either on physical verification of the goods or on verification of accounts - HELD THAT:- In view of the fact that the penalty came to be imposed solely on account of overwriting in Form-49 required to be filled up for transportation of goods and there was no discrepancy found, either on physical verification of the goods or in the bills or the books of accounts themselves, it could never be said that the goods were not properly accounted for. Answered in the negative, i.e. in favour of the assessee and against the revenue. Issues:Challenge to penalty imposed under Section 13-A(4) of the U.P. Trade Tax Act, 1948 solely based on overwriting on Form-49 without discrepancy in goods or accounts.Analysis:The revisionist filed a revision against the Commercial Tax Tribunal's order confirming the penalty imposed under Section 13-A(4) of the U.P. Trade Tax Act, 1948 for the assessment year 2003-04. The key question of law raised was whether the penalty could be imposed solely based on overwriting on Form-49 without any discrepancy noted during physical verification of goods or accounts. The Tribunal had dismissed the appeal and upheld the penalty.During the assessment year in question, the assessee faced a penalty concerning the sale of iron and steel, where goods were intercepted during transportation, and overwriting was found on Form-49. However, no discrepancies were noted upon physical verification of goods or accounts. The revenue authorities did not seek verification of the bill from the original books of accounts during the seizure, which was considered a prudent exercise.At the penalty stage, the assessee presented its books of accounts, and the bills were verified from there. Since no discrepancies were found in physical verification of goods, bills, or accounts, it was concluded that the goods were properly accounted for. The judgment answered the question of law in the negative, favoring the assessee and ruling against the revenue. Consequently, the revision was disposed of by the High Court of Allahabad.