Mens rea and bona fide exemption claim barred sales tax penalty where tax was not deposited with the return.

Penalty under sales tax law was held not leviable where a charitable assessee did not deposit tax with the return in bona fide reliance on a plausible claim for exemption. The Court found that the assessee had acted on the expectation of retrospective restoration of exemption, and the surrounding facts were not disputed by the State. On that basis, the absence of mens rea negatived penal liability, and the question was answered in favour of the assessee.

---

---

Issues: Whether penalty was leviable on the assessee for not depositing tax along with the return in the facts and circumstances of the case.

Analysis: The assessee was a non-profit charitable organisation and had claimed exemption on the basis of an earlier practice of retrospective restoration of exemption. The facts showed that the claim was made in the hope that the exemption would again be restored, and the State did not dispute the surrounding circumstances. On this basis, the Court found absence of mens rea in not depositing the tax with the return.

Conclusion: The penalty was not leviable on the assessee and the question was answered in favour of the assessee.

Ratio Decidendi: Penalty under the sales tax is not leviable where the assessee's conduct does not disclose mens rea and the default occurs in bona fide reliance on a plausible claim for exemption.

---