Mens rea is required for penalty on incorrect returns; mere inaccuracy does not sustain penalty under sales tax law.

Penalty for filing an incorrect return under section 43(1) of the M.P. General Sales Tax Act, 1958 was held unsustainable where the record showed only incorrectness and not deliberate falsity, concealment, or a guilty mind. The provision required the authority to be satisfied that the dealer had concealed turnover, furnished inaccurate particulars, or filed a false return, and the Tribunal found no positive finding of mens rea on the facts. On that basis, mere inaccuracy in the return did not justify penalty, and deletion of the penalty was upheld.

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Issues: Whether penalty under section 43(1) of the M.P. General Sales Tax Act, 1958 could be sustained for filing incorrect returns in the absence of mens rea or deliberate falsity.

Analysis: The provision conferred discretion to impose penalty where the authority was satisfied that the dealer had concealed turnover, furnished inaccurate particulars, or filed a false return. On the facts, the finding recorded was that the returns were incorrect, but there was no positive finding of deliberateness, falsity, or a guilty mind. The Tribunal held that mere incorrectness of the return, without proof of mens rea, did not attract penalty under section 43(1), and that the department had failed to establish the factual basis needed for imposition of penalty.

Conclusion: Penalty under section 43(1) was not exigible on the facts found, and the deletion of penalty was justified.

Ratio Decidendi: Penalty for filing an incorrect return under section 43(1) is not sustainable unless the return is shown to be accompanied by deliberate falsity or mens rea.

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