Independent evidence required for sales tax penalty; borrowed material and reassessment findings cannot sustain concealment penalty.

Penalty under Section 15-A(1)(c) of the U.P. Sales Tax Act requires an independent, evidence-based finding of suppression or concealment before it can be sustained. Where the penalty proceedings rested only on a survey by the Income Tax Department and no separate material or finding established the statutory ingredients, borrowed material and consequential reassessment findings were insufficient. The penalty was therefore unsustainable, the impugned order was set aside, and the revision succeeded in favour of the assessee.

---

---

Issues: Whether penalty under Section 15-A(1)(c) of the U.P. Sales Tax Act could be sustained when no independent finding or material was recorded to establish suppression or concealment.

Analysis: The revision arose from penalty proceedings founded solely on a survey conducted by the Income Tax Department and the alleged suppression noticed therein. The orders below did not record any independent finding of guilt against the assessee or any material establishing the ingredients required for levy of penalty. A penalty under Section 15-A(1)(c) cannot rest merely on borrowed material or on the fact that reassessment proceedings resulted in some tax determination; the Department must bring on record cogent material to prove the alleged concealment or suppression. In the absence of such a finding, the penalty order cannot stand.

Conclusion: The penalty was unsustainable and was rightly quashed; the issue is decided in favour of the assessee and against the revenue.

Final Conclusion: The revision succeeded, the impugned order was set aside, and the penalty proceedings did not survive.

Ratio Decidendi: Penalty under Section 15-A(1)(c) of the U.P. Sales Tax Act requires an independent, evidence-based finding of concealment or suppression, and cannot be upheld merely on borrowed material or consequential reassessment findings.

---