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Jay Pee Rewa Cement v. The Commissioner Of Trade Tax, U.P. Lucknow - SALES/TRADE TAX REVISION DEFECTIVE No. 1602 of 1998 [2006] RD-AH 1231 (18 January 2006)


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Court no.55

TRADE TAX REVISION NO.(1602) of 1998.

Jay Pee Rewa Cement, Iradatganj, Allahabad.           Applicant


The Commissioner, Trade Tax, U.P., Lucknow.  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 4th August, 1998 relating to the assessment year 1995-96 by which the Tribunal has confirmed the penalty under section 15-A (1) (0) of the Act levied at Rs.10, 500/-.

Brief facts of the case are that the applicant is a Company incorporated under the Indian Companies Act, 1956 engaged in the business of manufacture and sale of cement. The factory of the applicant is situated at Rewa, Madhya Pradesh and the sale depot is at Iradatganj, Allahabad. It is claimed that in the regular course of business, the applicant used to import cement from Rewa factory to its Iradatganj depot at Allahabad. Applicant is registered under the U.P. Trade Tax Act with the Assistant Commissioner (Assessment). It is claimed that the goods are always been imported from its factory against declaration form as contemplated under section 28-A of the Act.

The dispute relates to one of the consignment of cement consisting of 300 bags of cement. Assessing authority levied the penalty under section 15-A (1) (0) of the Act on the ground that on 18th January, 1996, one consignment of 300 bags of cement against challan no.145464 was imported from the Rewa factory. The driver of the vehicle at 1 O'clock broken the barrier and run away. Thereafter at 6.30 P.M. the driver of the vehicle produced the documents relating to the goods along with Form 31 no.F/CC/1675843, which was not entertained. Thereafter, the Trade Tax Officer, check post vide its letter dated 5th February, 1996 informed the Assistant Commissioner (Assessment) about such incident and has also stated that the first information report in this regard has also been lodged against driver and penalty under section 15-A (1) (j) of the Act at Rs.4500/- was levied on the driver. In the letter, he has suggested that since 300 bags of cement was being imported without declaration form; necessary action may be taken against the applicant. It appears that in pursuance thereof, penalty proceeding under section 15-A (1) (o) of the Act was initiated. Applicant appeared before the Assistant Commissioner (Assessment) and filed reply. In the reply, it was stated that the applicant duly handed over the challan no.145464 dated 18th January, 1996 and Form 31 No. F/CC/1675843 to the transporter. It was contended that the applicant cannot be held responsible for the illegal act of the transporter or the driver of the truck inasmuch as the goods were despatched against the challan. It has also been submitted that for the conduct of the driver, penalty under section 15-A (1) (j) of the Act had already been levied on the transporter. Assessing authority, however, not accepted the plea of the applicant and levied penalty at Rs.10,500/- vide order dated 02.03.1996. Order of the first appellate authority has been upheld in first appeal and by the Tribunal.

Heard learned counsel for the parties.

Learned counsel of the applicant submitted that the applicant is a manufacturer of cement having its factory at Rewa, Madhya Pradesh. He submitted that during the year under consideration, the total Forms 31 used for transporting the cement from its factory was 6620 and its total turnover was in several crores. Supplementary affidavit has been filed annexing the copy of the assessment order and order of the Tribunal for the year under consideration. Books of account have been rejected only on the basis of the present transaction dated 18th January, 1996 and the Tribunal found that apart from the alleged discrepancy  in transaction dated 18th January, 1996, no other discrepancy or any suppression was found. He submitted that for the fault of the driver or the transporter, the applicant should not be penalized and its intention should not be doubted. He submitted that on the facts and circumstances of the case, it cannot be inferred that the applicant has attempted to evade the tax. Learned Standing Counsel supported the order of the Tribunal.

Having heard the learned counsel for the parties, in my view on the consideration of the entire facts and circumstances of the present case, order of the Tribunal confirming the penalty levied under section 15-A (1) (o) of the Act is not sustainable. It is not the case of the revenue that challan no.145464 dated 18th January, 1996 was issued subsequently when the vehicle was intercepted at the check post and for the act of the driver, namely, breaking the barrier and crossing the barrier, penalty under section 15-A (1) (j) of the Act had already been levied against the driver. Tribunal in its order dated 20th October, 2004 while deciding the appeal no.88 of 2001 relating to assessment, which is filed along with the supplementary affidavit stated that apart from the impugned transaction dated 18th January, 1996, the applicant never been found importing the goods without declaration form. The total turnover of the year was more than 250 crores. Thus, in my opinion, having regard to the facts and circumstances of the case, no inference can be drawn that the applicant was involved in attempting to evade the tax while importing the cement on 18th January, 1996. It is settled principle of law that unless a case of an attempt to evade the tax is made out, penalty under section 15-A (1) (o) of the Act cannot be levied. In the case of  M/S Oriental Carbon Ltd. Vs. Commissioner of Sales Tax reported in 1985 UPTC page 613, this Court held that the penalty under section 15-A (1) (o) of the Act cannot be levied unless a case of an attempt to evade the tax is made out. The aforesaid view of this Court has been upheld by the Apex Court in the case of CST Vs. M/S Oriental Carbon Vs. reported in 1997 NTN, 105.

For the reasons stated above, the order of the Tribunal is set aside and the penalty is quashed.

In the result, revision is allowed. The order of the Tribunal is set aside and the penalty levied under section 15-A (1) (o) of the Act is quashed.




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