M/S Bharjatiya Steel Industries vs Commissioner, Sales Tax, U.P

The Supreme Court addressed the applicability of Section 4-B(2) of the U.P. Trade Tax Act concerning the imposition of penalty on the appellant for selling unusable iron scrap purchased under an 'AS IS WHERE IS' condition. The Court held that the appellant's actions did not constitute a breach of the undertaking as the unusable scrap was sold due to its non-utility in manufacturing, thus establishing that no malafide intention existed. The Court reversed the High Court's decision and upheld the Tribunal's ruling, thereby annulling the penalty imposed on the appellant.