Concealment penalty under sales tax law may be based on tax difference between returned and assessed turnover, not only detected concealment.

Under section 15-A of the U.P. Sales Tax Act, penalty for concealment of turnover is computed by reference to the tax difference between the returned turnover and the assessed turnover, not merely the actual concealment separately detected. The amended wording was read as a deliberate departure from the earlier scheme, extending to cases involving false accounts or false declarations even where turnover figures themselves do not change. The expression "avoided" was treated as covering both escaped and evaded tax, and "thereby" was read broadly enough to include concealment leading to best judgment assessment. The issue was answered against the assessee and in favour of the department.

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Issues: Whether, in a case of concealment of turnover under section 15-A of the U.P. Sales Tax Act, penalty is to be computed on the basis of the actual concealment detected or on the basis of the difference between the turnover returned and the turnover assessed.

Analysis: The amended provision was read in the context of the unamended scheme and the grouping of the penalty clauses. The omission of the words formerly linked to the returned turnover was held to be deliberate, because the amended clause covered situations where turnover itself may not change, including false accounts and false declarations. The word "avoided" was held to cover tax escaped as well as tax evaded, and in concealment cases the relevant measure is the tax that escaped assessment, which is reflected by the difference between the tax returned and the tax assessed. The meaning of "thereby" was treated as broad enough to include the consequence of concealment leading to best judgment assessment.

Conclusion: In concealment cases, penalty under the amended provision is to be computed with reference to the difference between the tax returned and the tax assessed, not merely the actual concealment detected; the question was answered against the assessee and in favour of the department.

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