False declaration in sales tax forms attracts penalty even without mens rea where tax was knowingly unpaid.

Issuing form IIIC(2) to a purchaser while knowing that no tax had actually been paid amounts to a false declaration that tax has been paid, attracting penalty under the anti-evasion provision of the U.P. Sales Tax Act, 1948. The commentary notes that the dealer's possession of an eligibility certificate and the fact that the form was obtained from the department did not negate liability, because the decisive fact was knowledge of non-payment. It further states that absence of mens rea was not sufficient to delete the penalty, and the penalty was treated as maintainable.

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Issues: Whether penalty was attracted under the U.P. Sales Tax Act, 1948 for issuing form IIIC(2) despite not having actually paid tax and whether absence of mens rea could justify deletion of the penalty.

Analysis: The assessee held an eligibility certificate under section 4-A of the U.P. Sales Tax Act, 1948 and had not paid tax, yet issued form IIIC(2) to the purchaser. The issuance of that form amounted to a declaration that tax had been paid. Even if the form had been obtained from the department, the assessee's knowledge that no tax had in fact been paid showed that the declaration was false. On that basis, the statutory mischief under section 15-A(1)(l) was held to be attracted, and the Tribunal's view that penalty could not survive for want of mens rea was found erroneous.

Conclusion: The issue was answered in favour of the Revenue. The penalty under section 15-A(1)(l) was held maintainable and the Tribunal's deletion of penalty was set aside.

Ratio Decidendi: Where a dealer knowingly issues a declaration form representing that tax has been paid though no tax has in fact been paid, penalty under the relevant anti-evasion provision is attracted, and the availability of the form from the department does not by itself negate liability.

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