2008 (11) TMI 625 - ALLAHABAD HIGH COURT

Whether in the event of a situation where an industry has been granted exemption under section 4A of the U.P. Trade Tax Act, 1948 notice can be issued under section 15A(1)(qq) of the Act for imposition of the penalty relying upon the provisions contained in section 8A(2)(a) of the Act and in case it is permissible, then under what circumstances?

Held that:- Merely because the price indicated in the invoice of the product is same in spite of non-payment of trade tax in the State of U.P. and because of payment of tax for the goods in question produced from other States shall not make out a case to take action for imposition of penalty under section 15A(1)(qq) of the Act. On account of exemption from trade tax, it is natural that the industrialists may earn more profit for their goods produced from exempted area than the one where no exemption has been granted but that is not a relevant ground for the State or its authorities to take action in the manner taken in the present case. Thus if there is no some statutory provision regulating the production, cost or price of the goods for sales and purchase, it shall not be lawful for the Government to interfere under the garb of section 15A(1)(qq) read with section 8A(2) of the Act. Appeal allowed.