False declaration penalty requires intent to deceive; bona fide mistake alone does not sustain the levy.

Penalty under section 15-A(1)(l) of the U.P. Sales Tax Act was attracted only where a dealer knowingly issued a false declaration or acted with intent to deceive. The court noted that the form III-C(2) declarations were supplied under the departmental scheme and were issued by the dealer under a bona fide belief that its sales were exempt under section 4-A. In the absence of any material showing a lying intent, and in view of the mistaken understanding shared by the dealer and the assessing authority, the declaration could not be treated as false. The penalty was therefore not sustainable.

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Issues: Whether penalty under section 15-A(1)(l) of the U.P. Sales Tax Act was justified for issuance of form III-C(2) by the dealer, and whether the declaration could be treated as false in the absence of a lying intent.

Analysis: Penalty under section 15-A(1)(l) is attracted only when a dealer issues or furnishes a false certificate or declaration by reason of which tax ceases to be leviable. The forms in question were supplied by the department itself under the scheme governing prescribed declarations, and the dealer had been issuing them under the bona fide belief that it was entitled to do so because its sales were exempt under section 4-A. The authority issuing the forms was also required to satisfy itself about the genuineness and reasonableness of the demand, which supported the dealer's bona fide understanding. The word 'false' in the penalty provision was held to mean more than merely incorrect or untrue and, in the context of a penal levy, imports a lying intent or intent to deceive. The record did not disclose any such intent, and the mistaken understanding of both the assessee and the assessing authority negatived culpability.

Conclusion: The declaration was not false within the meaning of section 15-A(1)(l), and the penalty was not sustainable.

Ratio Decidendi: A penalty provision for issuing a false declaration is attracted only where the declaration is knowingly false or issued with intent to deceive; a bona fide mistake or erroneous belief, without such intent, does not justify penalty.

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