Penalty for tax evasion requires positive proof, not mere document irregularity; fresh enquiry ordered over form 25 declaration.

Penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 is sustainable only where the authority, on proper material, positively finds an attempt to evade tax; mere irregularities or absence of transport documents are not enough. On the facts, the assessee's claim that it had produced a form 25 declaration showing it was not the last purchaser of the transported rubber required closer scrutiny, because the record was unclear on whether that declaration had been considered earlier. The penalty could not be sustained on the existing material, and the matter was remitted for fresh enquiry by the Sales Tax Officer (Enquiry), with liberty to rely on the declaration if not already examined.

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Issues: Whether penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 was sustainable when the assessee produced a form 25 declaration indicating that it was not the last purchaser of the transported rubber, and whether the matter required fresh enquiry.

Analysis: Penalty under section 29A(4) can be imposed only when the transport is without proper and genuine documents and the authority is positively satisfied, on proper material, that there was an attempt to evade tax due under the Act. Mere irregularities in transport do not by themselves justify penalty. Since the record showed that the goods were raw rubber taxable at the last purchase point and the assessee claimed to have produced a form 25 declaration to show that it was not the last purchaser, the factual foundation for inferring an attempt to evade tax required closer examination. The record was also unclear as to whether the declaration had been produced before the earlier authority or only before the Tribunal.

Conclusion: The penalty could not be sustained on the existing material and the matter had to be examined afresh by the Sales Tax Officer (Enquiry), with liberty to the assessee to rely on the form 25 declaration if not already considered.

Ratio Decidendi: Penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 is permissible only on a positive finding, based on proper material, that the transporter attempted to evade tax; mere absence or irregularity of documents is insufficient.

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