Wilful untrue return requires deliberate tax evasion, not honest mistake or bona fide belief in non-taxability.

Wilful submission of an untrue sales tax return requires deliberate omission made with knowledge that a taxable item is being excluded; inadvertence, oversight, honest mistake, and bona fide belief are not enough. A return is not wilfully untrue merely because the assessee takes an incorrect view of taxability. On the admitted facts, the assessee honestly believed the transaction fell within its contractual and accounting arrangement and did not intend to evade tax, and the prompt willingness to make the addition when pointed out supported bona fides. The conviction under Section 15(a) could not stand, and the appeal succeeded.

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Issues: Whether omission of a turnover item from the sales tax return was a wilful submission of an untrue return so as to attract penal liability under the Madras General Sales Tax Act.

Analysis: The expression "wilful" in the penal provision was held to exclude inadvertence, oversight, honest mistake, and bona fide belief. A return is not wilfully untrue merely because the assessee adopts an incorrect view that the item omitted is not taxable. To constitute the offence, the omission must be deliberate and made with knowledge that a taxable item is being excluded. On the admitted facts, the assessee honestly believed that the transaction fell within the contractual and accounting arrangement adopted with customers and did not intend to evade tax. The prompt readiness to make the addition when pointed out was treated as supporting bona fides.

Conclusion: The omission was not wilful and the conviction under Section 15(a) could not stand; the appeal succeeded in favour of the assessee.

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