Rebuttable presumption of tax evasion requires a real enquiry into intent before penalty can be finalised.

Non-furnishing of the statutory transport declaration under the KVAT framework creates only a rebuttable presumption of attempt to evade tax. A final penalty finding under the transport interception provisions cannot be sustained unless the authority makes a proper enquiry into whether the omission was deliberate or merely inadvertent. Mere later production of books of account is not by itself enough to displace the presumption, but the dealer must be allowed to show that the transaction had already been recorded before transport and that there was no intent to evade tax. Where that factual enquiry is inadequate, the penalty orders cannot stand as final.

---

---

Issues: Whether non-furnishing of Form 8FA declaration and the connected transport irregularity justified a final finding of attempt to evade tax and penalty, or whether the matter required fresh enquiry on the question of intention to evade.

Analysis: The failure to accompany the consignment with the declaration required under the KVAT provisions created a rebuttable presumption of attempt to evade tax. However, the enquiry under Section 47(6) required a proper determination of whether the omission was deliberate or merely inadvertent. Mere production of books of account after interception was not enough by itself to rebut the presumption, but the dealer was entitled to establish that the transaction had been duly recorded before transport commenced and that there was no intent to evade tax. Since that factual issue had not been examined with the depth necessary for a conclusive finding on intention, the existing orders could not stand as final.

Conclusion: The penalty orders were set aside and the matter was remanded for fresh consideration by the competent authority after affording the petitioner a reasonable opportunity.

Ratio Decidendi: Non-furnishing of the statutory transport declaration raises only a rebuttable presumption of evasion, and a final penalty finding cannot be sustained without a proper enquiry into whether the omission was purposeful or accidental.

---