Penalty computation under sales tax law turns on escaped assessment tax, not merely concealed turnover.

Penalty under section 15-A(1)(b) of the U.P. Sales Tax Act is to be computed by reference to the tax that would have escaped assessment if the dealer's returned turnover had been accepted as correct, not merely by the amount of concealed turnover in the books. The provision authorises penalty for concealment or inaccurate particulars, and its maximum is linked to one and a half times the avoided tax. Applying the construction adopted for the analogous Income-tax Act provision, the revising authority's reduction of the penalty on the wrong basis was unsustainable.

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Issues: Whether, for determining penalty under section 15-A(1)(b) of the U.P. Sales Tax Act, the amount should be based only on the turnover concealed in the account books or on the tax that would have escaped assessment if the returned turnover had been accepted, and whether the revising authority was justified in reducing the penalty to Rs. 150.

Analysis: Clause (b) of section 15-A(1) authorises penalty where a dealer has concealed particulars of turnover or furnished inaccurate particulars. The maximum penalty under that clause is linked to one and a half times the amount of tax which would have been avoided if the turnover returned by the dealer had been accepted as correct. The Court applied the construction accepted by the Supreme Court for the analogous provision in section 28(1)(c) of the Income-tax Act, 1922, holding that the relevant basis is the tax that would have escaped assessment on acceptance of the return, and not merely the concealed turnover by itself. On that footing, the revising authority's reduction of the penalty on a contrary premise was unsustainable.

Conclusion: The penalty under section 15-A(1)(b) had to be computed with reference to the tax that would have escaped assessment on the returned turnover, and the revising authority was not justified in reducing the penalty to Rs. 150.

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