Penalty for unaccounted goods sustained where contemporaneous admission and lack of bills supported the tax authorities' action.

Penalty under section 77(8) of the Rajasthan Sales Tax Act, 1994 was upheld because the goods were found in the dealer's custody without any entry in the books and without a purchase bill or voucher. The dealer's contemporaneous admission that the goods had been purchased without bill, that no accounting entry had been made, and that penalty could be imposed supported the tax authorities' action. A later plea of coercion and subsequent documents were rejected as a belated afterthought. The Tax Board erred in deleting the penalty, and the restoration of penalty in favour of the Revenue was sustained.

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Issues: Whether penalty under section 77(8) of the Rajasthan Sales Tax Act, 1994 was rightly deleted when the goods were found unaccounted, unsupported by bill or voucher, and the dealer had admitted the irregularity.

Analysis: The goods in question were found during survey in the respondent's custody without any entry in the books of account and without any supporting purchase bill or voucher. The respondent had also written that the goods were purchased without bill, no entry had been made in the accounts, and penalty could be imposed with release of the goods on payment. The later plea of pressure or coercion was raised only after a long lapse of time and was treated as an afterthought. In these circumstances, the tax authorities below had sufficient material to sustain the penalty, and the Tax Board erred in deleting it on the basis of subsequent documents and a belated explanation.

Conclusion: The deletion of penalty was unsustainable, and the penalty imposed under section 77(8) was rightly restored in favour of the Revenue.

Ratio Decidendi: Where possession of goods remains unaccounted for and the dealer's contemporaneous admission shows absence of supporting documents, a later explanation or subsequently produced material cannot displace a valid penalty under the statutory provision.

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