Penalty for alleged tax evasion requires a definite finding on document genuineness before intent to evade can be inferred.

A penalty for alleged tax evasion at an information collection centre cannot be sustained on suspicion alone. The authority must first record a definite finding on the genuineness and veracity of the documents accompanying the goods, and only then infer an intent to evade tax. Here, the goods were said to be accompanied by invoice, goods receipt, statutory declaration form and insurance papers, and entry at the centre was also noted, but no clear finding on document genuineness was made before imposing penalty. The penalty order was therefore unsustainable and the matter was remanded for fresh decision after hearing both sides.

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Issues: Whether penalty for alleged violation at the information collection centre could be sustained without a definite finding on the genuineness and veracity of the documents accompanying the goods and the resulting intent to evade tax.

Analysis: The goods were stated to be accompanied by the invoice, goods receipt, statutory declaration form and insurance papers, and the record also indicated entry at the information collection centre. The Tribunal proceeded on suspicion and concluded that there was an attempt to evade tax without first recording a clear finding on whether these documents were genuine. A finding on genuineness of the documents was necessary before inferring evasion and imposing penalty.

Conclusion: The penalty order could not stand on the existing findings, and the matter was remanded to the Tribunal for fresh decision after hearing both sides.

Ratio Decidendi: A penalty for alleged tax evasion cannot be sustained on suspicion alone unless the authority first records a definite finding on the genuineness of the relevant documents and the factual basis for evasion.

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