Hon’ble Rajes Kumar, J.—The present revision under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the “Act”) is directed against the order of the Tribunal dated 6.6.2001 in Appeal No. 415 of 2000 for the assessment year 1998-99 by which the Tribunal has rejected the appeal and confirmed the penalty under Section 15-A(1)(o) of the Act.

2. The applicant was a registered dealer under the U.P. Trade Tax Act and engaged in the business of manufacture and sale of cloths, which was exempted under Section 4 of the Act. The applicant’s unit claimed to be 100% export oriented unit. Acid was one of the raw materials used in the manufacturing of cloths. On 10.8.1998, the Check Post Officer has inspected Tanker No. D.L./G.B.-2562 loaded with 10100 kg. Glacial Acetic Acid. The driver of the vehicle produced one proforma invoice only issued by M/s. Dhampur Alco Chem. Ltd., New Delhi. In the absence of declaration form and other documents, the goods were detained and a show cause notice was issued. The applicant filed reply stating therein that the order of the supply was given by the applicant to M/s. Dhampur Alco Chem. Ltd., New Delhi, for the supply of Glacial Acetic Acid and one Form 31 No. 2113927 was also issued. A cheque No. 645933 dated 25.7.1988 for Rs. 3,24,000/- was also issued. In pursuance of the order, M/s. Dhampur Alco Chem. Ltd., New Delhi, has placed its order to M/s. S.S. Shanker Rav Mohartpatil S.S.K.L. Shakarnagar Akluj, Maharashtra. The said party has despatched 10100 kg. Glacial Acetic Acid against challan No. 355 dated 1.8.1998 to Delhi. The goods were despatched in Tanker No. D.L./G.B.-2562 from Shakarnagar, Maharashtra to Delhi. The driver of the vehicle was instructed to keep the vehicle away from the check post and wait for the necessary documents.

3. It is the case of the applicant that while the vehicle was standing before the check post and waiting for the documents, the Check Post Officer inspected the vehicle and found that the documents relating to the goods were not available. The copies of the invoice number, declaration form, etc. were produced before the Check Post Officer. However, the Check Post Officer has not accepted the plea of the applicant and passed the seizure order and demanded security at 40% of the value of the goods, which was reduced by the Joint Commissioner, Check Post to Rs. 82,458/- in the form of bank guarantee. The applicant furnished the bank guarantee and the goods were released. In pursuance of the seizure order, the penalty proceeding under Section 15-A(1)(o) of the Act was initiated. The applicant reiterated the reply given before the Check Post Officer and submitted that no case of an attempt to evade the tax has been made out and, therefore, the penalty was not leviable. However, the assessing authority has not accepted the plea of the applicant and levied the penalty at Rs. 82,458/- vide order dated 22.10.1999. The order of the assessing authority has been confirmed in first appeal and by the Tribunal in second appeal.

4. Being aggrieved by the order, the present revision has been filed. The Tribunal has held that at the time of inspection, the declaration forms and bills were not available and, therefore, there was a violation of Section 28-A of the Act.

5. Heard Sri Piyush Agrawal, learned counsel for the applicant, and learned Standing Counsel.

6. Learned counsel for the applicant submitted that in pursuance of the order booked by the applicant for the purchase of Glacial Acetic Acid, a sum of Rs. 3,24,000 was paid by cheque to M/s. Dhampur Alco Chem. Ltd., New Delhi on 25.7.1998. This establishes the intent to record the purchases in the books of account. He further submitted that the applicant was a manufacturer of handloom and powerloom cloths which were exempted from tax and since acid was raw material and not meant for sale. He further submitted that after the show cause notice invoice and declaration forms were submitted before the Check Post O