False declaration penalty under sales tax law fails where falsity is not proved by proper enquiry and reliable contrary evidence.

A penalty for alleged false declaration under the Rajasthan Sales Tax Act could not be sustained where the department failed to establish falsity through proper enquiry. The consignment documents indicated different intended destinations, the vehicle record was prepared by the transporter and was not decisive against the consignors or consignees, and the disclosed registration particulars were not shown false by independent verification. No notice was issued to the consignors or consignees, and the freight entries and driver's statement were not treated as conclusive in the absence of reliable contrary proof. The Tribunal therefore set aside the penalty and granted relief to the assessee.

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Issues: Whether penalty imposed under section 22A(7) of the Rajasthan Sales Tax Act, 1954 for alleged false declaration and suspected bogus registration particulars was sustainable on the facts found.

Analysis: The documents relating to the consignment showed the goods as intended for different destinations, while the goods vehicle record had been prepared by the transporter and was not decisive against the consignors or consignees. The registration particulars later disclosed were not shown to be false by proper enquiry, no notice was issued to the consignors or consignees, and no independent verification was made from the bank or other relevant sources. The freight entries and the driver's statement were not treated as conclusive, particularly when the statement was made in circumstances suggesting pressure for release of the vehicle. The apparent documentary position was accepted as the real position in the absence of contrary proof.

Conclusion: The penalty was not justified and the revision was allowed in favour of the assessee.

Final Conclusion: The concurrent orders sustaining the penalty were set aside, and the assessee obtained relief from the levy.

Ratio Decidendi: A penalty for false declaration under the sales tax law cannot stand where the department fails to establish falsity by proper enquiry and the documentary position supporting the assessee is not displaced by reliable contrary proof.

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