Penal provisions for concealment cannot apply absent mens rea; revised return accepted, higher VAT penalty set aside.

Penalty under Section 40(2) of the Jharkhand VAT Act was not sustainable where the assessee had filed a revised return that was accepted in assessment and the facts did not show deliberate concealment or intent to evade tax. The Court treated Section 40(2) as a penal provision aimed at concealment or furnishing incorrect particulars with the requisite mens rea, and held that the case, at most, attracted the default penalty under Section 30(4)(d). The higher penalty was set aside, and the amount already recovered was ordered to be refunded after deduction of the maximum penalty permissible under Section 30(4)(d).

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Issues: Whether penalty under Section 40(2) of the Jharkhand Value Added Tax Act, 2005 was sustainable when the assessee had purchased goods on SUGAM-G, later filed a revised return, and the revised return was accepted in assessment, and whether the recovery already made was liable to be refunded.

Analysis: The return default related only to non-disclosure of inter-State purchases in the original quarterly return, and the revised return was filed and accepted in the assessment proceedings. The purchases were made on the strength of SUGAM-G, so the facts did not support a case of concealment with intent to evade tax. The Court treated the power under Section 40(2) as directed against concealment or furnishing incorrect particulars with the requisite penal element, and held that on these facts the matter, at best, attracted the default penalty contemplated by Section 30(4)(d). In the absence of deliberate suppression or mens rea, the harsher penalty under Section 40(2) was not justified.

Conclusion: Penalty under Section 40(2) was set aside and the assessee's challenge succeeded; the amount recovered was directed to be refunded after deduction of the maximum penalty permissible under Section 30(4)(d).

Ratio Decidendi: Where a revised return is subsequently accepted and the facts do not establish deliberate concealment or intent to evade tax, a penal provision aimed at concealment cannot be invoked to impose the higher penalty merely because the original return was inaccurate.

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