Penalties for minor voucher and register lapses in gold transactions were set aside where the dealings were found genuine.

Penalties for not issuing printed vouchers and for omissions in GS 12 register entries concerning new gold ornaments were held unsustainable because the transactions were genuine, the stock discrepancy was negligible, and the explanation for non-availability of printed vouchers was supported by the record. The adjudicating authority had not fairly examined the defence or recorded any finding rejecting it, and the procedural lapses were treated as minor, technical, and unintentional rather than conduct warranting penal action. Separate penalties on the partners were also found unjustified. The penalties were set aside, except that the personal penalty appeal relating to the deceased appellant stood abated.

---

---

Issues: Whether penalties imposed on the firm and its partners for not issuing printed vouchers and for not making entries in the GS 12 register in respect of new gold ornaments received from goldsmiths were justified.

Analysis: The transactions were found genuine on verification, the discrepancy in stock was negligible, and the explanation that printed vouchers were not available at the relevant time was supported by the material on record. The adjudicating authority failed to examine the defence, did not record any finding rejecting the explanation, and did not fairly consider the procedure followed by the dealer for making entries in the register. In the circumstances, the lapses were treated as minor, technical, and unintentional, and not as conduct warranting penal action. The imposition of separate penalties on the partners was also found unjustified.

Conclusion: The penalties were not sustainable and were set aside in favour of the assessee, except that the personal penalty appeal relating to the deceased appellant stood abated.

---