Penalty for alleged tax evasion on an intercepted excavator was reduced after facts rebutted the presumption of intended evasion.

Penalty for alleged tax evasion on an intercepted excavator was found excessive because the authorities relied mainly on absence of documents and the statutory presumption without properly weighing the surrounding facts. The vehicle was newly purchased, was being moved for contract work, and the materials did not support an inference of intended sale within the State. The agreement produced by the owner could not be rejected merely for a stamp paper date discrepancy. Although the provision allowed a penalty up to twice the tax for attempted evasion, the facts did not justify the maximum levy, so the penalty was reduced and release was linked to payment of the modified amount.

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Issues: Whether the penalty imposed on the petitioner for alleged evasion of tax in respect of the intercepted excavator was justified, and whether the quantum of penalty required interference.

Analysis: The seizure arose from the absence of accompanying documents and the department relied on the statutory presumption against the owner. However, the materials showed that the excavator was a newly purchased vehicle brought into the State shortly after purchase, that the driver stated it was being taken for contract work, and that the surrounding circumstances did not support an inference of intended sale within the State. The agreement produced by the petitioner could not be rejected merely for the discrepancy in the date of the stamp paper, and the assessing authority did not properly weigh the totality of the circumstances before imposing the maximum penalty. Section 47(6) permits double the tax as the maximum penalty for attempted evasion, but the facts did not justify such a high levy.

Conclusion: The penalty was liable to be interfered with and reduced, while the detention-related relief was sustained only to the extent necessary for release on payment of the modified amount.

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