Randeep Singh Steel Private Limited Vs Commissioner Commercial Tax UP Lucknow (Allahabad High Court)
The Allahabad High Court heard multiple revisions involving similar issues and decided them through a common order. Sales/Trade Tax Revision No. 105 of 2025 was treated as the leading case, concerning the Tribunal’s order dated 27 January 2025 for Assessment Year 2014–15 under the U.P. VAT Act. The Court framed two legal questions: whether the Tribunal was justified in affirming penalty under Section 48(5) without verifying account books, and whether the Tribunal’s observations regarding prior use of OC Stamps were supported by any evidence.
The revisionist, a manufacturer and seller of iron ingot registered under the VAT Act, issued an excise-cum-tax invoice dated 1 May 2014 for goods dispatched by a vehicle that was intercepted the same day by the Mobile Squad. The goods were seized on allegations that the OC Stamp on the invoice had been reused by evaporating ink through heat and that the invoice number was handwritten instead of printed as required under Rule 44(6). The goods were later released, but penalty proceedings were initiated under Section 48(5), to which the revisionist responded.
The Assessing Authority imposed a penalty of Rs. 5,48,000 at 40% of the value of goods and created a liability of Rs. 4,38,400. The revisionist’s first appeal was dismissed on 9 May 2023, and the second appeal was rejected on 27 January 2025. The revisionist argued before the High Court that the penalty was imposed solely on presumption that the OC Stamp was reused, without proof. It was submitted that the authorities never inspected or called for the account books for Assessment Year 2014–15, nor conducted any survey after detention of the goods to verify whether entries were properly recorded. The revisionist contended that penalty proceedings cannot be initiated on suspicion, and that both appellate orders failed to address the specific grounds raised. It was further submitted that penalty under Section 48(5) is justified only when it is established through material evidence that goods found in a vehicle are not accounted for in the books of account. Reliance was placed on earlier High Court rulings holding that penalty requires clear, definite findings rather than assumption.
