Penalty for alleged tax evasion needs a clear finding of intent; transaction character belongs in assessment, not penalty proceedings.

Penalty under section 15A(1)(o) of the U.P. Sales Tax Act requires a clear finding of an attempt to evade tax; where the dealer produced the prescribed forms and transport documents at the check-post, disclosure was established and penalty could not rest on suspicion. The check-post authority's role under section 13A was limited to verifying accompanying documents and did not extend to deciding the true nature of the transaction. Whether the sale fell within section 6(2)(b) of the Central Sales Tax Act was a matter for assessment, not penalty proceedings. On that reasoning, the penalty order was unsustainable.

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Issues: Whether penalty under section 15A(1)(o) of the U.P. Sales Tax Act, 1948 was sustainable when the dealer had produced the requisite documents at the check-post and no attempt to evade tax was established, and whether the nature of the transaction under section 6(2)(b) of the Central Sales Tax Act, 1956 could be ined in penalty proceedings.

Analysis: For levy of penalty under section 15A(1)(o), the assessing authority had to record a finding that there was an attempt to evade payment of tax. The check-post authority under section 13A was concerned with the presence of the requisite documents and not with deciding the true nature of the transaction. Since form XXXI, form XXXV and other documents accompanied the goods, the transaction had been disclosed at the check-post and there was no material to infer concealment or evasion. Whether the sale was covered by section 6(2)(b) of the Central Sales Tax Act, 1956 was a matter for assessment and not for penalty.

Conclusion: The penalty was not justified and was liable to be set aside.

Final Conclusion: The revision succeeded and the penalty order based on an incorrect approach to section 15A(1)(o) could not stand.

Ratio Decidendi: Penalty for alleged evasion cannot be sustained unless the authority records a clear finding of attempt to evade tax, and the character of the transaction is not to be adjudicated in penalty proceedings where the goods were duly supported by the prescribed documents.

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