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2019 (5) TMI 798 - HC - VAT and Sales TaxLevy of penalty - Recording of transaction in the books of accounts - proof of delivery / dispatch of goods - Purchase and sale of Kirana, Spices and Chemicals - no transfer invoice or challan found as prescribed under Rule 41 of VAT Rules - imposition of penalty u/s 48(5) of the VAT Act - HELD THAT:- From the reading of Sub Section (5) of Section 21, it is clear and it provides that the dealer who is liable to pay tax while consigning or delivering any taxable goods to another dealer, whether as a result of sale or otherwise shall issue to the purchaser or consignee of goods a legible challan or transfer invoice - Rule 41 of the VAT Rule provides the challan or transfer invoice to be prepared so as referred under Sub Section 5 of Section 21. It is further clarified in Rule 41 as to how the challan or transfer invoice to be prepared and as to what would be contained in the said challan or transfer invoice which is required at the time of goods delivered or dispatched. From the bare perusal of the penalty order, which is confirmed by the Tribunal, there is no finding recorded by any of the authorities that any of the aforesaid conditions are not fulfilled or any of the conditions are flouted. In the instant case, it is clearly established that the goods which are purchased or sold by a registered dealers against the proper tax invoice, charging the tax plus Mandi Shulk dispatched from seller place to the cold storage on the instructions of the revisionist (purchaser) and the same are duly recorded in the register of the cold storage and the number of item namely 354 bags of Chilly was found by the (SIB) Authority, at the time of inspection held on 18.12.2014 and immediately in pursuance of the first notice issued by the (SIB) Authority, at the first stage itself, the books of accounts are produced by the Revisionist on the very date fixed, then what further remains to be placed by registered dealer - the entire proceedings namely the seizure and the consequential penalty proceedings is nothing but clearly an abuse of process of law at the hands of the respondent authorities. Rule 41 provides the challan or transfer invoice at the time of an occasion when the goods are delivered or dispatched. In the instant case, neither the goods are delivered nor the same are dispatched by the revisionist therefore, there was no occasion to prepare the challan or the transfer invoice - thus it was not a case where the penalty proceedings could legally be initiated and in fact, the Assessing Authority as well as the Tribunal were illegally and arbitrarily proceeded to impose and confirm the penalty. Revision allowed.
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