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M/S L.I.LTD. versus CST

High Court of Judicature at Allahabad

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M/S L.I.Ltd. v. Cst - SALES/TRADE TAX REVISION No. 994 of 1993 [2003] RD-AH 524 (15 December 2003)


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M/s Lipton India Limited ....Applicant


Commissioner of Sales Tax, Lucknow. ....Opp.Party


Hon'ble Rajes Kumar, J.

This revision under Section 11 of U.P. Sales Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 29.05.1993.

Applicant is Public Limited Company incorporated under the Indian Companies Act, 1956 having its registered office at 1-Transport Depot Road, Calcutta.

Applicant had its factory at Ghaziabad and Etah and engaged in the business of manufacture and sales of Vanaspati, Edible Oil, Milk Dairy product, Packet tea etc. In pursuance of the order given by applicant, M/s Nuclear Offset Printers, Bombay vide bill no.53 dated 23.11.1987 sold labels to the applicant. Since the applicant was urgently required the goods, it was sent by hand. According to the applicant Form-31 was to be collected from Delhi office but the person concerned instead of coming to Delhi for the collection of Form-31 proceeded to Ghaziabad for delivery of the goods. When the person concerned was intercepted, he submitted copy of bill. Since the goods was not accompanied by Form-31, goods was seized and subsequently, released on furnishing of security. In pursuance of the seizure order, penalty proceeding under Section 15-A (1)(o) of the Act was initiated. Applicant replied to the show cause notice that since the goods was urgently required, the same was sent personally by hand and the person concerned has to collect Form-31 from Delhi office but instead of collecting Form-31, he proceeded to give the delivery of goods at Ghaziabad. It was explained that the sale was against Form-C and the material was raw material and not for sale within the State of U.P. but for use in the manufacturing penalty should not be levied. Assessing Authority had not accepted the plea of the applicant and levied penalty under Section 15-A (1)(o) of the Act at Rs.21,160/-. First appeal filed by the applicant was rejected. Applicant filed second appeal before Tribunal, which was allowed in part. Tribunal has sustained the levy of penalty but has reduced the quantum of penalty to Rs.15,862/-.

Heard learned counsel for the parties.

Submission of learned counsel for the applicant is that penalty has been levied without any case of an attempt to evade the payment of tax. He submitted that goods was intercepted by Sales Tax Officer, Mobile Squad. Person immediately produced the invoices. Perusal of the invoices shows that sales was against Form-C. He submitted that the goods was labels, which were not meant for sale but were for consumption in the manufacturing of various items.

I have perused the order of Tribunal and the authorities below.

Assessing Authority has not recorded any finding of an attempt to evade tax. Tribunal has also not recorded any finding that there was any attempt to evade tax. Perusal of bill, annexure no.1 to the revision petition shows that in the bill, it is clearly mentioned that "goods delivered to Ghaziabad by hand delivery under Form-C." Applicant is not dealer of labels. It was not meant for sale within the State of U.P. but was required to be used in the manufacturing of final product. In the absence of any finding that there was an attempt to evade the tax penalty under Section 15-A (1)(o) of the Act cannot be sustained. In the case of M/s Jain Shudh Vanaspati Ltd., Ghaziabad and others Vs. State of U.P. and others, reported in 1983 UPTC, 198 Division Bench of this Court held that the goods can not be seized and penalty can not be levied merely because it was not accompanied by declaration Form unless a case of an attempt to evade the tax has been made out. For the reasons, stated above, penalty under Section 15-A (1) (o) of the Act at Rs.15,862/- can not be sustained and is liable to be set aside.

In the result, revision is allowed. Order of Tribunal dated 29.05.1993 is set aside and the penalty levied under Section 15-A (1) (o) of the Act is deleted.




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