Bogus ST-XXII declarations defeat deduction claim and justify tax demand and penalty where adequate opportunity was given

ST-XXII-based deduction was disallowed because the declaration forms were found, on departmental enquiry and repeated proceedings, to be bogus and not genuine. The assessee had been given multiple opportunities to produce supporting evidence and establish the authenticity of the forms but failed to do so, so the objection based on alleged lack of adequate opportunity was rejected. Precedents relied on by the assessee were held inapplicable because they did not concern cases where the declaration forms themselves were found to be false. The tax demand and penalty therefore stood undisturbed.

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Issues: Whether the assessee was entitled to deduction on the strength of ST-XXII declarations and whether the demand of tax and penalty could be disturbed on the ground of alleged lack of opportunity.

Analysis: The declarations were found, on departmental enquiry and repeated proceedings, to be not genuine. The assessee was afforded more than sufficient opportunities on multiple occasions to produce evidence and prove the genuineness of the forms, but failed to do so and instead prolonged the matter. In these circumstances, the plea that no adequate opportunity was granted was rejected. The cited precedents did not assist the assessee because they did not apply to a case where the declaration forms themselves were found to be bogus and the factual finding of non-genuineness had been consistently recorded by the authorities.

Conclusion: The deduction claim was not allowable and the challenge to the tax demand and penalty failed; the appeal was dismissed.

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