Statutory penalty for defective tax records upheld where invoice irregularities and incomplete accounts established violation

Penalty under section 45A of the KGST Act was sustained because the dealer's records showed material irregularities, including non-continuity of bills, multiple invoice sets, missing copies, and omission of sales covered by delivery notes. The return was not supported by a satisfactory explanation for the discrepancies, and the revisional authority found that true and complete accounts had not been maintained with mens rea reflected in the conduct. Applying the governing precedent, the court held that once the statutory violation attracting section 45A is established, penalty does not depend on a separate enquiry into intention. The challenge to the revisional orders therefore failed.

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Issues: Whether penalty under section 45A of the KGST Act was sustainable on the facts of the case, and whether the absence of a specific finding on mens rea vitiated the penalty order.

Analysis: The assessment records showed material irregularities in the maintenance of invoices and account books, including non-continuity of bills, use of multiple invoice sets, missing copies, and omission of sales covered by delivery notes from the return filed. The return was filed on the basis of the sales register and not on the basis of the personal account, and there was no satisfactory explanation for the discrepancy. The revisional authority also recorded a clear finding that the dealer failed to maintain true and complete accounts and that mens rea was embedded in the conduct. The court further held, applying the governing precedent on penalty for statutory tax defaults, that once the statutory violation attracting section 45A is established, the imposition of penalty does not depend upon an independent enquiry into intention.

Conclusion: The penalty under section 45A was upheld and the challenge to the revisional orders failed.

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