Penalty for tax evasion requires proof of a bona fide attempt to evade, not mere absence of documents at inspection.

Penalty under Section 15-A(1)(o) of the U.P. Trade Tax Act could be imposed only if authorities established a bona fide attempt to evade tax. The goods were covered by a proforma invoice, advance payment had been made by cheque before seizure, the goods were shown as raw material for an exempt manufacturing unit, and the relevant entries were accepted in the books. In these circumstances, mere non-production of documents at inspection did not by itself justify an inference of evasion, so the penalty was held not exigible.

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Issues: Whether penalty under Section 15-A(1)(o) of the U.P. Trade Tax Act was sustainable in the absence of a proved attempt to evade tax.

Analysis: The goods were supported by a proforma invoice and the dealer had made advance payment by cheque before seizure. The materials on record showed that the goods were raw material for an exempt manufacturing unit, and the entries relating to the goods were accepted in the books of account. In these circumstances, mere non-availability of documents at the time of inspection did not justify an inference of tax evasion. The legal position applied was that penalty under Section 15-A(1)(o) can be levied only when an attempt to evade tax is established.

Conclusion: The penalty was not exigible and the revision succeeded in favour of the assessee.

Ratio Decidendi: Penalty under Section 15-A(1)(o) of the U.P. Trade Tax Act cannot be sustained unless the authorities establish a bona fide attempt to evade tax.

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