Tax evasion penalty fails where transport records and account books were produced and no discrepancy was found.

Penalty for alleged tax evasion was found unsustainable where the transport documents and books of account were produced at interception and no discrepancy was detected. The Tribunal's factual findings showed that the sale invoice, goods receipt, computerized account books, purchase bill, stock statement and cash book were all available, and no enquiry was made from the consignee. The alleged statement of the driver alone was held insufficient to prove a bogus transaction or an attempt to evade tax. On those facts, a mere deviation from the route could not justify an inference of evasion, and no substantial question of law arose in appeal.

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Issues: Whether the penalty imposed for alleged evasion of tax under section 51(7)(c) was sustainable when the transport documents and books of account were produced at interception and no discrepancy was found; and whether any substantial question of law arose under section 68 warranting interference in appeal.

Analysis: The documents required for movement of goods were produced at the time of interception. The Tribunal recorded that the sale invoice, goods receipt, computerized account books, purchase bill, stock statement and cash book were produced and no discrepancy was noticed. The Tribunal also found that no enquiry was made from the consignee and that the alleged statement of the driver, by itself, was insufficient to establish a bogus transaction or an attempt to evade tax. The High Court accepted these factual findings and held that, in the absence of evidence of tax evasion, mere deviation from a route could not justify an inference of attempted evasion.

Conclusion: The penalty could not be sustained and no substantial question of law arose for consideration in the appeal.

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