Rebuttable presumption of evasion and maximum penalty construction upheld under the Madhya Pradesh entry tax law.

Section 7(5) of the Madhya Pradesh entry tax law was construed in the context of the Act's anti-evasion scheme: the presumption arising from failure to furnish the statement was held rebuttable, allowing the dealer to show absence of intent to facilitate evasion, and the assessing authority could impose a lesser penalty on the facts. The penalty described as ten times the entry tax was treated as only the maximum limit, not a compulsory fixed levy. On that construction, the provision was upheld and the objection that it was confiscatory was rejected.

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Issues: Whether Section 7(5) of the Madhya Pradesh entry tax law created a rebuttable presumption of evasion and whether the prescribed penalty of ten times the entry tax was a fixed, confiscatory levy or only the maximum penalty.

Analysis: The provision was construed in the context of the scheme of the Act, which uses the statement requirement to distinguish local goods from non-local goods and to prevent evasion of entry tax. The words creating the presumption were read in the same sense as a rebuttable presumption, consistent with established evidentiary usage. On that construction, the dealer could displace the presumption by showing that omission to furnish the statement was not with intent to facilitate evasion. The penalty language was also read as prescribing only an upper limit, leaving the assessing authority discretion to impose a lesser penalty according to the facts of each case. Construed in this way, the provision did not suffer from the vice attributed to it by the High Court.

Conclusion: Section 7(5) was upheld. The presumption was held to be rebuttable, and the penalty of ten times the entry tax was held to be only the maximum limit, not a compulsory fixed penalty.

Ratio Decidendi: A statutory presumption of evasion may be treated as rebuttable where the scheme and language of the enactment so require, and a penalty stated as ten times the tax may be construed as a maximum conferring discretion to impose a lesser amount.

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