Penalty for delivery record discrepancies under KGST law sustained where accounts showed material mismatch and duplicate notes were withheld.

Penalty under Section 45A of the KGST Act was upheld where accounts and delivery notes showed a material mismatch in quantities transported and accounted for, and the assessee failed to produce the duplicate copies of the delivery notes called for by the intelligence officer. The statutory breaches in maintaining accounts and delivery records supported a finding of conscious tax evasion, so invocation of the penal provision was justified. The quantified penalty was also sustained because Section 45A allows penalty up to twice the tax evaded where quantification is practicable, and the basis adopted was not shown to be arbitrary or disproportionate.

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Issues: (i) Whether penalty under Section 45A of the KGST Act was justified on the finding of discrepancy in accounts and failure to produce duplicate delivery notes. (ii) Whether the quantum of penalty imposed was excessive or liable to be interfered with.

Issue (i): Whether penalty under Section 45A of the KGST Act was justified on the finding of discrepancy in accounts and failure to produce duplicate delivery notes.

Analysis: The accounts and delivery notes showed a substantial mismatch in the quantity of raw rubber transported and accounted for. The assessee failed to produce the duplicate copies of the 16 delivery notes called for by the Intelligence Officer. The statutory breaches noticed included contravention of the requirements relating to accounts and delivery notes under the KGST Act and Rules. On these facts, the authorities concluded that there was conscious evasion of tax and that the ingredients for invoking the penal provision were established.

Conclusion: Penalty under Section 45A was rightly invoked and sustained against the assessee.

Issue (ii): Whether the quantum of penalty imposed was excessive or liable to be interfered with.

Analysis: Section 45A permits penalty up to twice the amount of tax evaded or sought to be evaded where quantification is practicable. The authority found that the goods shown in the delivery notes were transported in quantities far below the capacity of the vehicles, and the assessing officer had taken only a conservative basis by adopting ten times the quantity disclosed. In the absence of any supporting duplicate records, the quantified penalty could not be said to be arbitrary or disproportionate.

Conclusion: The quantum of penalty was not excessive and did not call for interference.

Final Conclusion: The penalty order was upheld in full and the challenge to the assessment and penalty failed.

Ratio Decidendi: Where statutory delivery records are withheld and the accounts reveal clear, material discrepancy indicating evasion, penalty under Section 45A of the KGST Act may be sustained and its quantification will not be interfered with unless shown to be arbitrary or unlawful.

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