Proper assessment and findings are necessary before disallowing input tax credit and imposing penalties under the U.P. VAT Act, 2008.

B. Amit Sthalekar, J.

1. The revisionist is aggrieved by the order of the Trade Tax Tribunal dated 12.9.2013.

2. Briefly stated that the facts of the case are that the revisionist is a registered dealer having a TIN No. 09552300340 and he is carrying on his business from Village Semara, Chinhat, Lucknow. During the year 2008-09 the Firm made certain purchases of raw materiel namely, timber from registered dealers including one M/s. Heena Timbers, Bahraich having TIN No. 09555700834. For these purchases tax invoices, 9R's as well gate passes of the Mandi Samiti were also issued. M/s. Heena Timbers was also a registered dealer and its registration certificate continued upto 23.12.2009 but thereafter its registration was cancelled by the department. On 23.12.2009 a first information report was also lodged against M/s. Heena Timbers under sections 420, 424, 467, 468 and 120B I.P.C. By the Assistant Commissioner, Tax, Bahraich in Police Station Kesarganj District Bahraich. The grievance of the revisionist is that while making assessment for tax for the year 2008-09, the claim of the Revisionist-Firm for credit of input tax was disallowed by the Assessing Authority and the Tax Invoice, 9R's and gate passes issued by M/s. Heena Timbers were not accepted and assessment of tax was thereafter made on the basis of best judgment assessment.

3. Aggrieved by the order of the Assessing Authority dated 30.8.2011 the Revisionist-Firm preferred an appeal before the Addl. Commissioner (Appeals), Commercial Tax, Lucknow which was also dismissed by order dated 23.1.2013. Aggrieved the revisionist-Firm preferred an appeal before the Commercial Tax Tribunal, Lucknow which has also been rejected by the impugned order dated 12.9.2013 on the ground that the Tax Invoices issued by M/s. Heena Timbers are forged and that the said Firm has not deposited the VAT collected by it.

4. Heard Shri Pradeep Agarwal, learned counsel for the revisionist and Shri Sanjeev Shankdhar, learned counsel for the respondent.

5. In the present revision the grievance of the revisionist is that the Tax Invoices showing payment of tax by M/s. Heena Timbers was issued to the revisionist-Firm alongwith Mandi Samiti gate passes and there was no reason for the Revisionist Firm to disbelieve the said documents or to believe that M/s. Heena had evaded payment of tax. If in the assessment proceedings against M/s. Heena Timber it came to light before the Taxing Authorities that M/s. Heena Timber was guilty of evasion of tax, the said liability could not have been fastened upon the revisionist-Firm and if at all any tax allegedly evaded was required to be recovered the same should have been recovered from M/s. Heena Timbers in proceedings to that effect.

6. Learned counsel for the revisionist further submitted that the mere fact that certain consignment of timber had been purchased from M/s. Heena Timbers in cash and the sale had not been shown by M/s. Heena Timbers in their registers or cash book it cannot lead to a presumption that there was a fraudulent sale with the intention to evade tax so far as the Revisionist-Firm was concerned and therefore the findings of the Tribunal to that effect was absolutely illegal and arbitrary. In addition to the assessment made by the Assessing Authority, the Tribunal has also held the Revisionist-Firm liable to payment of penalty under section 54(1)(19) of the U.P. VAT Act, 2008. Section 54(1)(19) of the U.P. VAT Act provides for imposition of penalty of a sum equal to five times of the amount of the input tax credit where a dealer or any other person falsely or fraudulently claims an amount of input tax credit. So far as the Books and Registers of the Revisionist-Firm are concerned the entries therein have not been doubted and it is not the case of the Revenue that the entries made therein did not tally with the invoices.

7. The submission is that once the tax invoices have been duly issued by M/s. Heena Timbers, the Tribunal ought to have recorde