Revised return duty after taxability is settled: failure to correct exemption-based returns sustained penalty.

Where a binding Supreme Court declaration made exemption-based returns untenable, the assessee was required to file revised returns disclosing the turnover as taxable. The failure to do so, despite later remitting tax in instalments, meant the original returns remained incorrect and untrue because the statutory duty was to reflect the settled legal position. Voluntary payment after the declaration did not cure the defect in the returns or negate the omission to revise them. On that reasoning, penalty under section 45A(d) of the Kerala General Sales Tax Act, 1963 was upheld.

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Issues: Whether penalty under section 45A(d) of the Kerala General Sales Tax Act, 1963 was sustainable where the assessee had filed exemption-based returns before the law was declared by the Supreme Court, but did not file revised returns after the declaration of taxability and instead paid tax in instalments.

Analysis: The original returns were filed when different High Court decisions supported the assessee's claim of exemption on wheat products. Once the Supreme Court declared that atta, suji and similar products were manufactured products attracting tax, the legal position stood settled and the assessee became bound to revise the returns and disclose the turnover as taxable. The assessee did not do so, but chose to remit tax in instalments without revising the returns, which indicated a conscious attempt to avoid the interest consequences that would follow from revised returns. Voluntary payment of tax after the Supreme Court ruling did not cure the false character of the original returns, because the statutory obligation was to file true and correct revised returns after the law had been declared.

Conclusion: The levy of penalty under section 45A(d) was upheld and the challenge failed.

Ratio Decidendi: After a binding declaration of law that makes a return-based exemption untenable, the assessee must file revised returns reflecting the correct taxable position, and failure to do so renders the returns incorrect and untrue for penalty purposes.

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