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2013 (9) TMI 111 - HC - VAT and Sales TaxPenalty Proceedings u/s 4-B(5) of the Trade Tax Act, 1948 - Revenue was of the view that the Tendu Leave was not utilized in U.P. which was purchased in U.P. by paying concessional rate of tax - Held that:- The initiation of penalty u/s 4-B(5) of the Trade Tax Act proceedings was not desirable specially when the final verdict in the quantum appeal was yet to come from the Hon'ble Supreme Court - There was no justification for levy of the penalty specially when the quantum appeal had not attained the finality and matter was subjudice before the Hon'ble Supreme Court who had already granted leave being satisfied prima facie. The assessee had purchased Tendu Leave after payment of the Tax on concessional rate - The said raw-materials was exclusive used for the finished goods, which were sold within the State of U.P. Perhaps due to cheap labour, raw-material was sent outside the State on temporary basis but the same was returned in the form of finished goods to the State of U.P., where it was finally disposed by way of sale. The assesse had not concealed any particular or any transaction - Everything was disclosed to the A.O. For the inter State Trade or Commerce, the penalty was leviable u/s 4-B(6) of the Act - but no penalty was levied under the said provision as there was no inter State Trade or Commerce - No finished goods were exported from the State - No sale was made outside the State - Raw-materials was received back in the form of finished goods - The assesse had already deposited the difference of Tax - the tax was already paid @15% along with interest - There was no loss to the revenue - There was no attempt to conceal any transaction. In the case of the BHAGWAN DASS VIJAY KUMAR MANDI DABWALI vs. COMMISSIONER OF INCOME TAX [1980 (4) TMI 10 - PUNJAB AND HARYANA High Court] - The penalty may not be imposed merely because there was a technical or venial breach and not deliberately defiance of law or conscious disregard of obligation by the assesse - The department must establish some sort of mens rea - There was no mens rea on the part of the assessee- petitioner as there was no concealment of any particular or transaction - The entire tax along with the interest was deposited before initiation of proceedings - There was no loss to revenue – Order set aside – Decided in favour of Assesse. .
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