Factual finding on absence of fraudulent tax evasion meant no referable question of law arose from penalty cancellation.

Penalty for fraudulent evasion or concealment under the Rajasthan Sales Tax Act could be sustained only where tax avoidance was shown to be deliberate or fraudulent. The Board of Revenue found on the facts that the assessee bona fide believed the imported liquor was already tax paid and not taxable again, a view supported by the department's earlier approach on the same basis. That finding was treated as one of fact, since absence of conscious concealment or deliberate evasion does not ordinarily raise a question of law. No referable question of law arose from the cancellation of penalty, so reference was declined.

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Issues: Whether the Board of Revenue's finding that no fraudulent evasion or concealment of tax was established under section 16(1)(i) gave rise to a question of law warranting a reference under section 15(1) of the Rajasthan Sales Tax Act, 1954.

Analysis: Penalty under section 16(1)(i) could be sustained only if the evasion or avoidance of tax was fraudulent or there was concealment of liability to tax. The Board of Revenue had found, on the facts, that the assessee entertained a bona fide belief that the imported liquor was already tax paid and could not be taxed again, and that the department had earlier acted on the same basis. The settled position applied was that where the Tribunal or Board reaches a conclusion on the absence of conscious concealment, deliberate evasion, or fraudulent conduct, such a conclusion is ordinarily one of fact. On that footing, no referable question of law arose from the order setting aside the penalty.

Conclusion: The finding cancelling the penalty was held to be purely factual, and the request for reference failed.

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