Bona fide mistake defeats sales tax penalty where non-filing of returns was found non-deliberate

Penalty under section 14(8)(a) of the Andhra Pradesh General Sales Tax Act was held not leviable where the assessee's failure to file returns was found to arise from a bona fide mistake. The Tribunal treated the explanation as a question of fact, noted that the assessee was not earlier on the departmental rolls and that there was a genuine dispute whether the stone ballast supply was a sale or a works contract, and concluded that the default was not deliberate. That factual finding was left undisturbed in revision, so the assessee received the benefit of the proviso to section 14(8).

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Issues: Whether penalty under section 14(8)(a) of the Andhra Pradesh General Sales Tax Act was leviable when the assessee failed to file returns under a bona fide mistake, so as to attract the proviso to section 14(8).

Analysis: The question whether the assessee acted under a bona fide mistake was treated as essentially one of fact. The Tribunal examined the explanation that the assessee was not on the departmental rolls earlier and that there was genuine controversy whether the supply of stone ballast amounted to a sale or a works contract. On that basis, it recorded a reasoned finding that the default was not deliberate and that the assessee was entitled to the benefit of the proviso to section 14(8). No compelling reason was shown to disturb that factual conclusion in revision.

Conclusion: Penalty was not leviable, and the finding of bona fide mistake was upheld.

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