Penalty for non-filing of return requires clear statutory default and no reasonable cause; mere omission does not prove concealment.

A mere failure to file a return under the U.P. Sales Tax Act does not, by itself, establish concealment of turnover for penalty purposes, because the provisions dealing with non-filing and concealment are distinct. Penalty cannot be sustained on an assumed overlap between the two clauses. Penalty for non-filing also requires a clearly prescribed filing period and absence of reasonable cause; where the amended statutory scheme made the time for filing uncertain and the older rules no longer fitted the amended position, that uncertainty constituted reasonable cause. In a taxing statute, the penal provision must be construed strictly, and the penalty order was therefore unsustainable.

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Issues: (i) Whether penalty could be sustained on the footing that failure to file a return necessarily amounted to concealment of turnover under section 15-A of the U.P. Sales Tax Act; (ii) Whether penalty for failure to file the return was liable to be imposed under section 15-A(1)(a) when the statutory position about the time for filing returns was uncertain and the default was claimed to be without reasonable cause.

Issue (i): Whether penalty could be sustained on the footing that failure to file a return necessarily amounted to concealment of turnover under section 15-A of the U.P. Sales Tax Act.

Analysis: The penalty order proceeded on the assumption that non-filing of the return under clause (a) also established concealment under clause (b). The provisions were distinct. A mere failure to furnish a return did not, by itself, justify an inference that particulars of turnover had been concealed or inaccurately furnished.

Conclusion: The finding of concealment was unsustainable and was against the revenue.

Issue (ii): Whether penalty for failure to file the return was liable to be imposed under section 15-A(1)(a) when the statutory position about the time for filing returns was uncertain and the default was claimed to be without reasonable cause.

Analysis: The return-filing machinery had to be read with the amended section 7 and the relevant rules. In the circumstances existing at the material time, the statutory scheme was uncertain and the older rules were no longer apt to regulate the amended position. Since section 15-A(1)(a) applied only where there was a failure to furnish a return within the prescribed time and without reasonable cause, the absence of a clearly prescribed period and the uncertainty in the law furnished a reasonable cause for non-filing. In a penal provision in a taxing statute, the construction had to be strict, and the existence of an alternative remedy did not bar relief where the order was plainly erroneous.

Conclusion: The penalty under section 15-A(1)(a) was not justified and the decision was in favour of the assessee.

Final Conclusion: The penalty order could not stand because neither concealment nor a penal default without reasonable cause was established on the statutory scheme then in force.

Ratio Decidendi: A penalty under a fiscal penal provision cannot be imposed unless the statutory default is clearly made out and the failure is shown to be without reasonable cause; a mere omission to file a return does not, by itself, establish concealment of turnover.

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