Penalty under sales tax law requires guilty intent; omission without intention to deceive could not sustain the penalty.

Penalty under section 43(1) of the M.P. General Sales Tax Act requires guilty intention to deceive the department, and the existence of such intention is a question of fact. The assessee had separately recovered sales tax from customers but omitted those amounts from turnover in the return. On the facts found, the Court held that there was no intention to deceive and rejected the plea that technical mens rea was sufficient. The penalty was therefore not sustainable in law.

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Issues: Whether the penalty imposed under section 43(1) of the M.P. General Sales Tax Act was lawful on the facts and circumstances of the case.

Analysis: The assessee had separately recovered sales tax from customers during the assessment year but did not include those amounts in the turnover shown in the return. The question was whether this omission amounted to deliberate concealment or furnishing of a false return within section 43(1). The Court held that penalty under this provision requires a guilty intention to deceive the department, and that the existence or absence of such intention is a question of fact. On the facts found, there was no intention to deceive, and the reference to technical mens rea was rejected.

Conclusion: The penalty of Rs. 7,500 was not imposed lawfully and was not sustainable in law.

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