Mens rea is essential for CST penalty where a dealer knowingly misrepresents goods as covered by registration.

Penalty under section 10A of the Central Sales Tax Act, 1956 depends on a knowingly false representation that the goods were covered by the dealer's registration certificate. Mens rea is essential; a mere mistake or honest belief is insufficient. On the stated facts, timber was not included in the registration certificate or the registration application, yet the dealer issued C forms treating timber as covered. Those circumstances negated bona fide belief and established a false representation with guilty intention, making the dealer liable to penalty.

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Issues: Whether the dealer, while purchasing timber against C forms, falsely represented that the goods were covered by its registration certificate so as to attract penalty under section 10A of the Central Sales Tax Act, 1956.

Analysis: Liability under section 10(b) of the Central Sales Tax Act, 1956, depends on a false representation made with knowledge that the goods were not covered by the registration certificate. Mere error or an honest belief does not suffice, as mens rea is an essential ingredient. On the facts, timber was not mentioned in the registration certificate or in the application for registration, the omission of the item could not be ignored, and the dealer itself issued C forms certifying that timber was covered by the certificate. These circumstances negatived any bona fide belief and showed a false representation.

Conclusion: The dealer made a false representation with the requisite guilty intention and was liable to penalty under section 10A of the Central Sales Tax Act, 1956; the finding is against the assessee and in favour of the Revenue.

Ratio Decidendi: For penalty under section 10A, the false representation contemplated by section 10(b) must be made knowingly, and mens rea is essential; a bona fide mistaken belief is not enough.

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