Unreliable survey procedure defeated penalty for alleged undisclosed stock, as factual findings supported deletion.

Penalty for alleged undisclosed stock could not be sustained because the survey was conducted contrary to mandatory search procedure, including failure to associate independent witnesses. The authority also found no reliable basis for the stock estimate and no satisfactory explanation for the manner of measurement, while the stock register was available at the premises. The appellate findings that the survey report was unreliable and that penalty was unwarranted were treated as pure findings of fact, and no substantial question of law arose. The penalty was therefore deleted and the revision failed.

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Issues: Whether the penalty imposed for alleged undisclosed stock was sustainable when the survey proceedings were held to be contrary to the prescribed procedure under the search and seizure rules.

Analysis: The revision turned on the evidentiary value of the survey report and the legality of the inspection process. The stock register was available at the premises, but the authority found no satisfactory explanation for the manner in which the alleged stock was measured and no reliable basis for the estimate adopted. The record also showed non-compliance with the requirement of associating independent witnesses during the search, which undermined the credibility of the survey. The concurrent appellate findings that the survey report was unreliable and that the penalty under the penalty provision was not justified were based on the material on record and were treated as pure findings of fact. No substantial question of law arose from those findings.

Conclusion: The penalty was rightly deleted and the revision failed.

Ratio Decidendi: Where a survey is conducted in violation of the mandatory search procedure and the factual findings on stock verification are not shown to be perverse, the resultant survey report cannot be the basis for sustaining penalty for alleged undisclosed goods.

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