False representation penalty under sales tax law requires proof of knowing falsity, not mere mistaken disclosure.

Penalty under clause (b) of Section 10A of the Central Sales Tax Act, 1956 is not attracted merely because purchased goods fell outside the registration certificate; the provision requires a false representation made knowingly or with dishonest intent. A bona fide or honestly mistaken statement, even if incorrect, does not by itself justify penal action. On the facts, the certificate had been altered in a way consistent with an honest error, and the department failed to prove that the dealer knew the representation was false. The penalty was therefore not legally justified, and the issue was answered in favour of the assessee.

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Issues: Whether penalty under Section 10A of the Central Sales Tax Act, 1956 was legally leviable for a breach of clause (b) of Section 10 where the dealer's representation was not shown to be false to his knowledge.

Analysis: Penalty under the sales tax provision is not attracted merely because the goods purchased were not covered by the registration certificate. The expression used in the provision requires a false representation, and the falsehood must be established with reference to the dealer's knowledge or dishonest intent. A bona fide or honestly mistaken representation, even if incorrect, does not by itself justify penal action. On the facts, the certificate had been scored through in a manner that could support an honest though erroneous belief, and the department had not proved that the assessee knew the representation to be false.

Conclusion: The penalty was not legally justified and the answer to the referred question was in favour of the assessee.

Ratio Decidendi: Penalty for false representation under clause (b) of Section 10 of the Central Sales Tax Act, 1956 requires proof that the representation was knowingly false or made with mens rea.

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