Deliberate suppression in sales tax returns justifies penalty when false branch transfer claims conceal taxable turnover.

Penalty under Section 48 of the Haryana General Sales Tax Act, 1973 was upheld because the dealer had originally shown inter-State sales as branch transfers and revised the returns only after detection at the sales tax barrier and verification of stock transfers. The record supported deliberate suppression of taxable turnover, not a bona fide mistake, and mens rea was inferred from the surrounding material and conduct. The statutory penalty provision was therefore attracted, the challenge to its levy failed, and no substantial question of law was found to arise.

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Issues: Whether penalty under Section 48 of the Haryana General Sales Tax Act, 1973 was justified for filing incorrect returns and suppressing taxable turnover by showing inter-State sales as branch transfers.

Analysis: The revised returns were filed only after detection of the consignments at the sales tax check barrier and verification of stock transfers from the depots. The material on record showed that the assessee had originally disclosed inter-State sales as branch transfers and later corrected the returns after detection. In these circumstances, the filing of incorrect returns was not treated as a bona fide mistake. The conduct was found to amount to deliberate suppression of turnover with a view to avoid payment of tax. The statutory penalty provision was held to be attracted because mens rea and a deliberate attempt to conceal taxable turnover were established from the record.

Conclusion: The penalty was held to be valid and the challenge to its levy failed.

Final Conclusion: No substantial question of law was found to arise, and the assessee's challenge to the penalty was rejected.

Ratio Decidendi: Penalty under the sales tax law is sustainable where the dealer knowingly files false returns and suppresses taxable turnover to evade tax, and the existence of deliberate concealment may be inferred from the surrounding material and conduct.

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