2025-VIL-1224-ALH
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VAT High Court Cases

U.P. VAT Act, 2008 - Penalty under Section 48(5) of UP VAT Act, Presumption-based Proceedings, Verification of Books of Accounts - The vehicle was intercepted and the goods were seized on the ground that the O.C. Stamp affixed on the tax invoice was being reused, and the invoice number was written by hand instead of being printed as per the rules. Penalty proceedings were initiated under Section 48(5) of the UPVAT Act - Whether the penalty proceedings under Section 48(5) of the UPVAT Act were legally justified based on mere presumption/suspicion, without any verification of the Revisionist's books of accounts – HELD - In the case in hand, neither any provisional assessment proceedings were initiated, nor any survey or search was conducted at the business premises of the revisionist. Therefore, the inference drawn only on the basis of seizure of the goods that due entries were not made in the books of account cannot be justified - The penalty proceedings under Section 48(5) of the UPVAT Act cannot be initiated solely on the basis of presumption or suspicion. For the imposition of penalty, the authorities need to make a definite conclusion that there was an intention to evade tax and that the transaction in question was not duly recorded in the books of accounts - Mere suspicion or doubt cannot justify the initiation of penalty proceedings, and the authorities must have cogent material to prove that the entries were not recorded in the books of accounts - For initiation of proceedings, the authority has to come to a definite conclusion that there was an intention to evade payment of tax and therefore, the transaction in question has not been duly recorded in the books of account. In absence thereof, the proceedings initiated against the revisionist cannot be justified - the impugned orders are set aside and revision is allowed
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