Penalty notice needs proof of concealment; rejected books and best judgment assessment alone cannot sustain it.

Penalty proceedings under section 15-A of the U.P. Sales Tax Act, 1948 required satisfaction that the assessee had concealed turnover particulars or deliberately furnished inaccurate particulars. Rejection of books and a best judgment assessment yielding higher turnover did not, by themselves, prove concealment or falsity in the return. The department had to identify the specific item said to be incorrect and support the allegation with material, so the assessee could respond. In the absence of such material, an adverse assessment alone could not justify issuance of a penalty notice, and the notice was held to be without jurisdiction.

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Issues: Whether a notice proposing penalty under section 15-A of the U.P. Sales Tax Act, 1948, could be sustained merely because the assessee's books were rejected and a best judgment assessment resulted in a higher turnover.

Analysis: The jurisdiction to initiate penalty proceedings under section 15-A depended on the assessing authority being satisfied that the assessee had concealed particulars of turnover or deliberately furnished inaccurate particulars. Rejection of books and a higher best judgment estimate did not by themselves establish concealment or falsity in the return. The burden lay on the department to show that the turnover declared was necessarily wrong, and the assessee was entitled to know the particular item said to be incorrect so that an explanation could be offered. In the absence of any such material, the mere fact of an adverse assessment could not justify the penalty notice.

Conclusion: The notice was without jurisdiction and could not be sustained.

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