Concealment penalty needs independent evidence; rejected explanation alone cannot sustain tax penalty for turnover suppression.

Penalty for concealment of turnover under the U.P. Sales Tax Act requires independent material showing conscious concealment; rejection of the dealer's explanation in assessment proceedings, by itself, is not enough. A false or unaccepted explanation does not automatically justify a penalty, and material from a subsequent survey cannot be used for the relevant year. Because the department relied only on the assessment material and no separate objective evidence supported concealment, the statutory basis for penalty was not met, and the penalty order was quashed in favour of the assessee.

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Issues: Whether penalty for concealment of turnover under section 15-A(1)(c) of the U.P. Sales Tax Act could be sustained when the only material against the dealer was the rejection of its explanation regarding an entry in the diary, and whether reliance on a subsequent survey could support the penalty.

Analysis: Penalty proceedings under the sales tax law are penal in character, and the department must establish concealment on material independent of the assessee's explanation merely being disbelieved. A false explanation in assessment proceedings does not by itself justify the inference that turnover was concealed. The material from the survey made in the subsequent year was irrelevant to the year in question. The appellate authority and the Tribunal did not base the penalty on any independent objective material apart from the assessment material, and therefore the statutory requirement for imposing penalty was not satisfied.

Conclusion: The penalty was not sustainable and was liable to be set aside in favour of the assessee.

Final Conclusion: The revision succeeded, the penalty order was quashed, and no costs were awarded.

Ratio Decidendi: Penalty for concealment of turnover cannot be imposed merely because the assessee's explanation is rejected in assessment proceedings; it must rest on independent material showing conscious concealment.

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