2012 (12) TMI 994 - HC - VAT and Sales Tax

Summary

Issues involved: Revision under section 58 of the U.P. Value Added Tax Act, 2008 against the cancellation of penalty u/s 54(1)(14) of the VAT Act for the assessment year 2009-10.

Summary:
The case involved a revision filed against the cancellation of a penalty under section 54(1)(14) of the VAT Act for the assessment year 2009-10. The petitioner, engaged in manufacturing and sale of detergent powder, had a penalty levied due to a blank column in Form No.38 during a truck inspection. The first appellate authority upheld the penalty, but the Tribunal later canceled it. The High Court, after hearing both parties, noted that the blank column was due to insufficient space and was pasted on the back of the form. No discrepancy was found upon physical verification, and there was no malafide intention to conceal information. Citing precedents, the Court emphasized the absence of mens rea and loss to revenue, leading to the dismissal of the revision and upholding the Tribunal's decision.

The High Court considered the technical nature of the mistake in Form No.38, where a column was left blank due to insufficient space, leading to the penalty imposition. However, upon physical verification, no discrepancy was found, indicating no malafide intention to conceal information. The Court highlighted the absence of mens rea and loss to revenue as crucial factors in justifying the cancellation of the penalty, following established legal principles from relevant case laws.

The Tribunal's decision to cancel the penalty was based on the inadvertent and technical nature of the mistake in Form No.38, where necessary information was pasted on the back due to space constraints. The Court emphasized the lack of malafide intention or concealment of information by the assessee, leading to the conclusion that there was no justification for the penalty imposition. Citing legal precedents, the Court upheld the Tribunal's decision, dismissing the revision filed by the department and emphasizing the importance of mens rea and revenue loss in penalty cases.

In conclusion, the High Court dismissed the revision filed by the department, upholding the Tribunal's decision to cancel the penalty under section 54(1)(14) of the VAT Act for the assessment year 2009-10. The Court's decision was based on the technical nature of the mistake, absence of malafide intention, and the lack of revenue loss, highlighting the significance of mens rea in penalty cases.