Penalty for attempted tax evasion requires a clear statutory finding; interception alone was insufficient and the orders fell.

Penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 could not be sustained without a clear finding that the owner of the goods attempted to evade tax due under the Act. Rule 35A(4)(b) likewise required a finding of attempted evasion in relation to the transaction during which the goods were transported. The authorities proceeded only on the basis that the vehicle was intercepted at a different place and did not examine the explanation for movement of the vehicle or record the statutory finding required by law. In the absence of that finding, the impugned orders were liable to be quashed.

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Issues: Whether a penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 could be sustained without a clear finding that the owner of the goods attempted to evade payment of tax due under the Act.

Analysis: Section 29A(4) authorises imposition of penalty only where there is an attempt to evade tax, and rule 35A(4)(b) similarly requires a finding to that effect in relation to the transaction in course of which the goods are transported. The orders of the authorities did not contain any clear finding on attempted evasion. The officer proceeded on the basis that the vehicle was intercepted at a different place and treated that circumstance as sufficient, without examining the explanation for the movement of the vehicle or recording the statutory finding required by law.

Conclusion: The penalty could not be sustained in the absence of the requisite finding of attempted evasion, and the impugned orders were liable to be quashed.

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