Sales tax penalty requires independent proof of mens rea and deliberate concealment; assessment findings alone are insufficient.

Penalty under the U.P. Sales Tax Act could not be sustained without independent proof of mens rea and deliberate concealment of turnover. Penalty proceedings were treated as quasi-criminal, so the department had to positively establish concealment and furnishing of inaccurate turnover; a finding in assessment proceedings or mere rejection of the assessee's explanation was insufficient. On the record described, the revisional authority found no material beyond the seized rokar bahi entries to prove concealment, and that finding was not shown to be perverse or contrary to evidence. The revisional order quashing the penalty was therefore upheld.

---

---

Issues: Whether penalty under section 15-A(1)(a) and (c) of the U.P. Sales Tax Act could be sustained in the absence of proof of mens rea and deliberate concealment of turnover, and whether the revisional authority was justified in quashing the penalty.

Analysis: Penalty proceedings under the Act were held to be akin to quasi-criminal proceedings, and the burden lay on the department to positively prove deliberate concealment of particulars of turnover and furnishing of inaccurate turnover. A finding in assessment proceedings, or the mere rejection of the assessee's explanation, was held insufficient by itself to justify penalty. The revisional authority had recorded that, apart from the seized rokar bahi entries, there was no other material to establish mens rea or concealment, and that finding was not shown to be perverse, based on inadmissible evidence, or contrary to the record. The Court also held that the subsequent best judgment assessment and the factual dispute regarding the seized books did not, without more, establish deliberate concealment for penalty purposes.

Conclusion: Penalty could not be imposed without independent proof of mens rea and deliberate concealment, and the revisional order quashing the penalty was upheld.

Ratio Decidendi: In penalty proceedings under the sales tax law, the revenue must independently prove mens rea and deliberate concealment; assessment findings alone do not automatically sustain a penalty.

---