Bona fide mistake and pre-amendment rule breach cannot justify sales tax penalty absent conscious concealment.

Penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 is discussed as requiring conscious concealment or deliberate furnishing of inaccurate particulars; where an incorrect return entry was a bona fide mistake and the error was voluntarily disclosed, penalty was not sustainable. The text also explains that, before the 2 January 1976 amendment, section 16(1)(n) applied only to wilful contravention of the Act and did not extend to breaches of the Rules, so failure to file Form 86 under rule 26 could not attract that penalty for the pre-amendment period. It further notes that no referable question of law arose in revision.

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Issues: (i) Whether penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 was sustainable when the assessee's incorrect return entries were found to be a bona fide mistake without concealment or mala fide intention. (ii) Whether, prior to the amendment effective from 2 January 1976, penalty under section 16(1)(n) of the Rajasthan Sales Tax Act, 1954 could be imposed for contravention of rule 26 and failure to file form 86.

Issue (i): Penalty under section 16(1)(e) depends on conscious concealment or deliberate furnishing of inaccurate particulars. Where the assessee voluntarily disclosed the error at assessment and the authorities found no mala fide intention, the matter turned on findings of fact. In such circumstances, the discretionary relief granted by the appellate authority could not be interfered with in revision.

Conclusion: The penalty under section 16(1)(e) was rightly set aside and the assessee succeeded on this issue.

Issue (ii): Section 16(1)(n), as it stood before amendment, covered only wilful contravention of the Act and did not extend to breaches of the Rules. Since the allegation related to non-filing of form 86 under rule 26, no penalty could be imposed under that clause for the period before the amendment brought rules within its scope.

Conclusion: The penalty under section 16(1)(n) was not leviable for breach of rule 26 before 2 January 1976 and the assessee succeeded on this issue as well.

Final Conclusion: The revisional challenge failed because no referable question of law arose, and the orders cancelling the penalties were left undisturbed.

Ratio Decidendi: Penalty for concealment cannot be sustained in the absence of conscious or mala fide suppression, and a penal clause limited to contravention of the Act cannot be extended to breaches of the Rules unless the statute is amended to do so.

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