Penalty under section 13-A(4) needs a reasoned finding on unaccounted goods; a paper discrepancy alone is insufficient.

Penalty under section 13-A(4) of the U.P. Sales Tax Act is sustainable only where the authority, after considering the explanation and hearing the dealer, records a reasoned finding that the goods were omitted from accounts, registers or documents, or that the statutory basis for seizure is otherwise made out. A mere mismatch in accompanying transport papers, where the dealer identifies the consignor and explains the discrepancy as a clerical mistake, is not enough unless that explanation is disproved. Where the real allegation is movement without proper documents or in-transit diversion, the document notes that a different penal provision may be relevant. The principle stated is that penalty cannot rest on suspicion alone and must fit the specific statutory preconditions.

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Issues: Whether penalty under section 13-A(4) of the U.P. Sales Tax Act, 1948 could be sustained when the goods were allegedly accompanied by a wrong set of transport papers and the dealer's explanation identified the consignor and asserted bona fide transport.

Analysis: Section 13-A(1) and section 13-A(1-A) empower seizure in specified situations, including where goods are not accounted for or cannot be traced to a bona fide dealer, while section 13-A(4) authorises penalty only when the authority, after considering the explanation and hearing the person concerned, is satisfied that the goods were omitted from the relevant accounts, registers or documents. The orders below did not record any finding that the 30 bales were unaccounted for in the petitioner's records or in the records of the disclosed consignor, nor any finding that the consignor was untraceable or had denied delivery. The discrepancy in the accompanying papers was explained as a clerical mistake in handing over the wrong set of papers, and the authorities did not disprove that explanation. If the allegation was that the goods were carried without the proper documents or were not taken out in transit, the appropriate provision was not section 13-A(4) but the other penal provisions relied upon by the Court.

Conclusion: Penalty under section 13-A(4) was not legally sustainable on the facts found.

Final Conclusion: The seizure and penalty proceedings were held to be unsupported by the statutory basis invoked, and the assessee obtained quashing of the adverse orders with consequential refund and costs.

Ratio Decidendi: Penalty under section 13-A(4) can be imposed only when the statutory preconditions of omission from accounts or documents, or the equivalent traced-bona-fide-dealer requirement under the seizure provisions, are satisfied by a reasoned finding; a mere discrepancy in accompanying papers, explained as a mistake, is insufficient.

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