U.P. VAT penalty cannot rest on uncorroborated truck driver statements when transport documents support the goods movement.

Penalty under the U.P. VAT Act could not rest on presumption or on the truck driver's uncorroborated statement where the goods were supported by invoice, bilti, transporter's bill and Form 38. The Court noted that no independent material showed breach of statutory requirements while bringing the goods from outside the State, and the Tribunal itself could not verify whether the truck had been unloaded at Mathura. In the absence of corroboration, no intention to evade tax could be inferred, so the penalty proceedings were unsustainable and the Tribunal's order was set aside.

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Issues: Whether penalty under the U.P. VAT Act could be sustained on the basis of presumption and the statement of the truck driver, despite the goods being accompanied by invoice, bilti, transporter's bill and Form 38.

Analysis: The revision challenged the penalty affirmed by the Tribunal under the U.P. VAT Act. The record showed that the goods were carried with the relevant tax invoice and transport documents, and there was no material independently establishing that the dealer had violated the statutory requirements while bringing the goods from outside the State. The Court held that the statement of the truck driver, standing alone and without corroboration, could not furnish a valid foundation for penalty proceedings. It further noted that the Tribunal itself could not ascertain whether the truck had in fact been unloaded at Mathura, and no intention to evade tax could be inferred merely from an uncorroborated statement.

Conclusion: Penalty proceedings could not be sustained and the Tribunal's order was set aside; the question of law was answered in favour of the assessee and against the revenue.

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