Concealment penalty requires deliberate mens rea; bona fide mistake on taxability can defeat penalty under sales tax law.

Penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 requires concealment of particulars or deliberate furnishing of inaccurate particulars, so a merely incorrect return is not enough without conscious mens rea. Where the assessee had recorded the transactions in its books, had not collected tax, and revised the return after inspection on a bona fide view that the transaction was not taxable, the conduct pointed to a genuine mistake or dispute on taxability rather than deliberate concealment. The penalty power is discretionary and should not be used merely because it is legally available.

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Issues: Whether penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 was justified where the assessee had not disclosed the turnover as taxable in the original return but had revised the return and paid tax after inspection, claiming a bona fide belief that the transaction was not taxable.

Analysis: Penalty under section 16(1)(e) lies only where there is concealment of particulars or deliberate furnishing of inaccurate particulars. Both limbs require a conscious and deliberate element, and a mere incorrect return, without mens rea, is insufficient. Where the assessee has recorded the transactions in the books, has not collected tax, and promptly revised the return after inspection, the conduct supports a bona fide mistake or bona fide dispute on taxability rather than deliberate concealment. The statutory penalty power is also discretionary and is not to be exercised merely because it is lawful to do so.

Conclusion: The penalty was not justified, and the setting aside of the penalty was in law. The revision petition failed.

Ratio Decidendi: Penalty for concealment or inaccurate particulars cannot be imposed unless the omission or incorrect disclosure is deliberate and conscious; a bona fide belief on taxability negates the requisite mens rea.

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