Knowledge required for sales tax penalty: false bills alone were insufficient without proof of conscious production.

Penalty under section 7-A(2) of the A.P. General Sales Tax Act could not be sustained because the Revenue failed to establish that the assessee knowingly produced false bills. The claim for exemption on second purchases was found to be unsupported, but the Tribunal recorded that there was no material showing conscious production of false bills. As that knowledge element was necessary to attract the penalty, and the Court found no basis to disturb the Tribunal's factual finding, penalty was held not leviable.

---

---

Issues: Whether penalty under section 7-A(2) of the A.P. General Sales Tax Act, 1957 could be sustained when the Revenue failed to establish that the assessee knowingly produced false bills.

Analysis: The assessment related to a claim of exemption on the footing of second purchases. The authorities found that the claim was unsupported and that the bills produced were false, but the Tribunal recorded a finding that there was no material to show that the assessee had knowingly produced false bills. The material before the Court did not justify interference with that finding, and the element of knowledge necessary to fasten the penalty was not established.

Conclusion: Penalty could not be levied against the assessee under section 7-A(2).

---