Intention to evade tax is required for penalty; a mere Form-31 defect could not sustain the levy.

Penalty under Section 15-A(1)(O) of the U.P. Trade Tax Act could be imposed only where the Assessing Officer recorded satisfaction, in the penalty order itself, that the dealer intended to evade tax; a mere technical defect in Form-31 was not enough. On the facts, the assessee was a 100% export oriented unit enjoying exemption, and there was no allegation of any taxable dealings or evasion. The penalty was therefore not sustainable, and the question of law was answered in the negative in favour of the assessee.

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Issues: Whether, in the absence of any intention to evade tax, a mere technical defect in Form-31 warranted imposition of penalty under Section 15-A(1)(O) of the U.P. Trade Tax Act, 1948.

Analysis: Penalty under Section 15-A(1)(O) could be imposed only if the Assessing Officer was satisfied that the dealer had an intention to evade tax, and such satisfaction had to appear from the penalty order itself. A bare reference to the defect in Form-31, without any recorded finding on intention to evade tax, was insufficient. On the facts, the assessee was a 100% export oriented unit enjoying exemption, and there was no allegation that it had dealt in the goods so as to evade tax.

Conclusion: The penalty was not sustainable. The question of law was answered in the negative, in favour of the assessee and against the Revenue.

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