Stock suppression and unaccounted sales justified maximum penalty under sales tax law in a quasi-criminal proceeding.

Surprise inspection revealed substantial stock shortage, unaccounted sales of high speed diesel and motor spirit, and nearly 350 bills omitted from the day book and stock register. The authorities treated these omissions as a continuing pattern of suppression and tax evasion rather than accidental lapses, and the quasi-criminal nature of the penalty proceeding did not prevent imposition of the highest statutory sanction. The Court held that the record independently justified the maximum penalty under section 45A of the Kerala General Sales Tax Act, 1963, and upheld the penalty.

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Issues: Whether, on the facts found in surprise inspection and the recovery of unaccounted sales bills and stock discrepancies, imposition of maximum penalty under section 45A of the Kerala General Sales Tax Act, 1963 was justified.

Analysis: The inspection revealed substantial stock shortage, unaccounted sales of high speed diesel and motor spirit, and nearly 350 bills not reflected in the day book or stock register. The statutory authorities concurrently found that the omissions were not mere accidental lapses but formed part of a continuing pattern of suppression and tax evasion. In a proceeding of quasi-criminal character, the Court noted that the quantum of penalty had already been examined by the revisional authorities and that, even independently, the extent of evasion disclosed by the record justified the maximum penalty prescribed by the statute.

Conclusion: The imposition of maximum penalty under section 45A was upheld and the challenge to the penalty failed.

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