Penalty requires proved mens rea; absence of deliberate concealment defeated sales tax penalty for omitted turnover.

Penalty under section 16(1)(e) of the Rajasthan Sales Tax Act was held unsustainable because the facts did not show deliberate concealment, wilful misrepresentation, or intentional evasion. The Court treated the taxability of atta, maida and suji, and the effect of concessional wheat purchases under section 5C, as issues on which two views were possible, and it declined to rule on the pending turnover dispute. In the absence of proved mens rea, the statutory basis for penalty was not established, so no penalty could be imposed on the assessee.

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Issues: Whether penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 could be imposed on the assessee for not including the sales of atta, maida and suji in the taxable turnover.

Analysis: The decisive question was whether the omission was deliberate. The taxable character of the goods and the effect of the concessional purchase of wheat under section 5C were treated as matters on which two views were possible, and the Court declined to express any opinion on the quantum dispute pending before the revenue forum. In that setting, the Court held that the facts did not justify an inference of intentional misrepresentation, wilful concealment, or deliberate furnishing of inaccurate particulars. The absence of proved mens rea meant that the statutory basis for penalty was not established.

Conclusion: Penalty under section 16(1)(e) was not sustainable on the facts as no deliberate concealment or wilful intention to evade tax was proved.

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