RAJES KUMAR, J. - (1.) PRESENT revision under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') is directed against the order of the Tribunal dated July 17, 2006, relating to the assessment year 1998 -99.
(2.) BRIEF facts giving rise to the present revision are that the applicant established a new unit for the manufacturing of insecticides and pesticides and was holding eligibility certificate under Section 4A of the Act and, therefore, its turnover of insecticides and pesticides were exempted. The applicant was also registered under the Central Sales Tax Act, 1956 (hereinafter referred to as 'the Central Act') and was entitled to purchase raw material at concessional rate of tax after issuing form C. During the year under consideration, the applicant had purchased isoprotone and melathine for Rs. 14,16,920 from outside the State of U.P. Instead of using such isoprotone and melathine in the manufacturing of insecticides and pesticides, the applicant had sold such isoprotone and melathine as such for Rs. 17,81,051 against from IIIB and deposited the tax on such sales. The assessing authority issued the notice under Section 10A of the Central Act with the allegation that the applicant had violated the provisions of Section 10(d) of the Central Act. The assessing authority was of the view that the applicant was issued registration certificate for using such raw material in the manufacturing of insecticides and pesticides while the raw material have been sold as such. The applicant filed reply and submitted that isoprotone and melathine were sold as such because such raw materials were not useable and they were likely to be damaged and, therefore, they were sold. It was submitted that the sales were voluntarily disclosed and the tax had been paid. It was further submitted that in case, raw material had been used in the manufacturing of insecticides and pesticides, the manufactured product would not be liable to tax because the applicant was holding the eligibility certificate under Section 4A of the Act. In view of the above, it was submitted that there was no bad intention on the part of the applicant and the reasons given above, amount to the reasonable excuse and, therefore, penalty was not leviable. The assessing authority though accepted the explanation of the applicant and the reasons for the sale of the aforesaid raw material and had also held that the default was a technical default, still had levied the penalty of Rs. 85,000 being six per cent, which was minimum penalty leviable. Being aggrieved by the order, the applicant filed an appeal before the Deputy Commissioner (Appeals), who vide order dated June 11, 2002 allowed the appeal in part. Though the levy of penalty has been upheld but it was reduced to Rs. 5,000 as token penalty. The first appellate authority has accepted the explanation of the applicant and held the default as a technical default only. Being aggrieved by the order of the Deputy Commissioner (Appeals), Commissioner of Trade Tax filed appeal before the Tribunal. The applicant has not filed any appeal. The Tribunal by the impugned order allowed the appeal and set aside the order of the first appellate authority and restored the order of the assessing authority. As a result of the Tribunal order, penalty levied by the assessing authority at Rs. 85,000 has been restored.
(3.) HEARD Sri Alok Kumar, learned Counsel for the applicant and Sri Nimai Das, learned Standing Counsel.;