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THE COMMISSIONER TRADE TAX U.P. LUCK. versus S/S VISHAL CHEMICALS CHANDAUSI

High Court of Judicature at Allahabad

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The Commissioner Trade Tax U.P. Luck. v. S/S Vishal Chemicals Chandausi - SALES/TRADE TAX REVISION No. 388 of 2000 [2007] RD-AH 2297 (12 February 2007)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

COURT NO.22

TRADE TAX REVISION NO.388 OF 2000

The Commissioner Trade Tax, U.P., Lucknow.       ....Applicant

Versus

S/S Vishal Chemicals, Chandausi.   .Opp.party

***************

Hon'ble Rajes Kumar, J.

Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 20.10.1999 relating to the assessment year 1997-98, by which Tribunal has confirmed the order of the first appellate authority deleting the penalty under section 13-A (4) of the Act.

Brief facts of the case are that the dealer/opposite party (hereinafter referred to as "Dealer") was registered under U.P. Trade Tax Act and had sold 14 drums Mentha Oil against invoice no.6 dated 26.08.1997 to M/s Star Chemicals, Barabanki. On 27.08.1997, when the goods were coming from Barabanki to Chandausi it was intercepted by the Trade Tax Officer, Mobile Squad, Sitapur. Alongwith the goods invoice no.6 dated 26.08.1997 issued by M/s Vishal Chemicals, Chandausi in favour of M/s Star Chemicals, Barabanki and letter of M/s Star Chemicals, Barabanki dated 27.08.1997 was available, in which it was mentioned that the goods were being returned as it was not in accordance to the sample. The goods were detained and was subsequently released. In pursuance of the seizure order, penalty proceedings under section 13-A (4) of the Act was initiated. Penalty was levied on the ground that on enquiry it was found that M/s State Chemicals, Barabanki was not in existence.  It was also held that no receipt had been furnished in support of the claim that Barabanki party had applied for the registration and had furnished the security. It was also observed that on the seizure of the goods, books of account have not been produced. Being aggrieved by the penalty order under section 13-A (4) of the Act dealer has filed the appeal before the Deputy Commissioner (Appeals), who vide order dated 29.01.1998 allowed the appeal and set aside the penalty order. Commissioner of Trade Tax filed appeal before the Tribunal, which has been dismissed by the impugned order. Both the first appellate authority and the Tribunal have held that the present dealer is a bonafide dealer and the goods had been sold against invoice no.6 dated 26.08.1997 and the said invoice is duly recorded in the books of account. It has been further held that M/s Star Chemicals, Barabanki had applied for the registration vide receipt no.1587 dated 14.08.1997 and it was also bonafide dealer. Since the goods were found traceable to the bonafide dealer and were found entered in the books of account of the dealer, both the appellate authorities have held that it is not the case of penalty under section 13-A (4) of the Act. Learned Standing Counsel submitted that on enquiry M/s Star Chemicals, Barabanki was found not in existence and at the time of checking no builty was found alongwith the goods and, therefore, penalty has rightly been levied.

I do not find any substance in the argument of learned Standing Counsel.

Section 13-A (4) of the Act read as follows:

"13-A. Power to seizure

1. .........

2. .........

3. ........

4. If such authority, after taking into consideration the explanation, if any, of the dealer or, as the case may be, the person incharge and giving him an opportunity of being heard, is satisfied that the said goods were omitted from being shown in the account registers and other documents referred to in sub-section (1) it shall pass an order imposing a penalty not exceeding forth percent of the value of such goods as he deems fit."

Perusal of section 13-A (4) of the Act reveals that penalty can only be levied in case if the goods were found omitted to have been shown in the books of account, documents or register.  Admittedly, when the goods were checked by Trade Tax Officer, Mobile Squad on 27.08.1997 invoice no.6, dated 26.08.1997 issued by the dealer was available. Letter dated 27.08.1997 of M/s Star Chemicals, Barabanki, was also available by which goods had been returned, as it was not in accordance to the samples. It is not the case of the revenue that invoice no.6, dated 26.08.1997 was not found entered in the books of account. Though it is doubtful to say that M/s State Chemicals, Barabanki was not in existence in view of the findings recorded by the Tribunal that M/s Star Chemicals, Barabanki had applied for registration vide receipt no.1587, dated 14.08.1997 but even assuming that the said firm was not in existence, this fact is not material for the levy of penalty under section 13-A (4) of the Act. In view of the fact that the dealer was admittedly registered dealer and had sold the goods against invoice no.6,  dated 26.08.1997, which was duly found entered in the books of account, thus, in the circumstances, it can not be said that the condition precedent for the levy of penalty, namely, that the goods were omitted to have been shown in the books of account, document or register is present.

In the circumstances, revision is devoid is merit and is liable to be dismissed.

In the result, revision is devoid of any merit and is accordingly, dismissed.

Dt.12.02.2007

R./


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