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2019 (11) TMI 667 - HC - VAT and Sales TaxImposition of penalty on the assessee under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 - Whether authorities are justified in imposing penalty under Section 54 (1) (14) of the U.P. Value Added Tax Act, 2008 without assigning reasons to support the finding of intention to evade payment of tax? - principles of natural justice - HELD THAT:- The finding of intention to evade tax had been recorded by the assessing authority on account of various fields of Import Declaration Form being found blank and the vehicle description being overwritten on that Form. The assessing authority also disbelieved the explanation furnished by the assessee on the strength of the excise documents and the fact that the assessee was a manufacturer. It is material to note that, in the present case, undisputedly, the assessee is a manufacturer who is found to have paid excise duty and additional duties and cess at the rate of 10.30 percent amounting to ₹ 20,630.85 against invoice no. 687. Similarly, duty had been paid against the other invoice - Again, it is undisputed that the assessee was a manufacturer of excisable goods for which the goods forming subject matter of penalty proceedings were raw material. Therefore, it cannot be disputed that the assessee would have been entitled to avail CENVAT with respect to the duty paid on such raw material. It is not the case of the revenue that the assessee was engaged in clandestine import and sale of sponge iron. In absence of such allegation, the explanation offered by the assessee merited very serious consideration than has been offered by the assessing authority or the Tribunal. The Tribunal has merely rejected the explanation and relied heavily on the fact that the Import Declaration Form was left blank in material fields. Once it was not disputed that the excise documents were accompanied with the goods which disclosed payment of excise duty and it was also admitted to the revenue that the assessee was engaged in manufacture of goods wherein the goods being imported were to be used as raw material, the Tribunal ought to have given more meaningful consideration to this material and its consequences, before dismissing the appeal filed by the assessee - before reaching a positive conclusion as to existence of mens rea or guilty intention of mind, the Tribunal must carefully weigh all material available on record and examine their consequence in light of the law laid down by this Court and in the context of the fact allegations made by the revenue. The matter is remitted to the Tribunal to decide the appeal afresh, preferably within a period of three months from today on the strength of the evidence available on record - revision allowed by way of remand.
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