2026-VIL-945-ALH
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VAT High Court Cases

U.P. VAT Act, 2008 - Imposition of penalty despite acceptance of Books of Account - Appellant was engaged in manufacturing welding electrodes and goods were seized on ground that Column No. 6 of Form-38 was blank; penalty proceedings initiated solely on ground of technical omission in Form-38 - Whether penalty can be sustained merely on account of technical discrepancy when books of account and turnover have been accepted in assessment order – HELD - Once books of account and disclosed turnover of Appellant have been accepted by assessing authority and no other material has been brought on record to establish mens rea on part of Appellant to evade payment of tax or to suppress tax liability, penalty proceedings cannot be sustained merely on account of technical discrepancy. It is settled that existence of mere technical or procedural irregularity, in absence of any material demonstrating an intention to evade tax, cannot by itself justify imposition of penalty - Once assessment order was passed after due consideration of books of account, disclosed turnover and penalty proceedings initiated against Appellant, and no adverse finding was recorded with regard to turnover or genuineness of transactions, no adverse inference could thereafter have been drawn against Appellant in penalty proceedings - The non-filling of Column No. 6 of Form-38 was attributable to urgency of requirement of goods and not due to any deliberate intention to evade tax. The goods were found to constitute raw material used in manufacturing process and authorities never found that said goods were sold by Appellant – The impugned penalty order is not sustainable and quashed – The revision is allowed
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