1985 (3) TMI 303 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of penalty under Section 15-A (1) (o) of the U. P. Sales Tax Act for importing goods without Forms 31, exercise of power under Section 10-B of the Act by Deputy Commissioner, interpretation of Section 28-A regarding penalty imposition, intention to cause loss to revenue or evade tax as a prerequisite for penalty imposition.

Analysis:
The judgment pertains to an assessee's revision under Section 11 (1) of the U. P. Sales Tax Act challenging the penalty imposed for importing goods without Forms 31. The assessee, a limited company, imported carbon black without requisite forms, leading to a penalty of &8377; 27,305. Initially, the assessing authority did not impose a penalty due to no mens rea element and proper entry in excise records. However, the Deputy Commissioner disagreed, imposing the penalty under Section 15-A (1) (o) and later rectifying it to &8377; 27,305. The Tribunal reduced the penalty but found the assessee guilty under Section 28-A. The assessee argued lack of material for Deputy Commissioner's action under Section 10-B and contended that penalty imposition was unjustified due to no intention to cause revenue loss or evade tax.

The counsel for the assessee argued that the Tribunal's finding of no intention to cause revenue loss should negate penalty imposition. In contrast, the Standing Counsel for revenue asserted that any breach of Section 28-A rendered the assessee liable for penalty, emphasizing the legislative intent to prevent tax evasion through the provision. The Court held that mere breach of Section 28-A was insufficient for penalty imposition under Section 15-A (1) (o) without intent to cause revenue loss or tax evasion. Consequently, the revision was allowed, quashing the Tribunal's order without costs.