False declaration penalty requires mens rea; a bona fide mistake in Form 31 did not justify penalty.

Penalty for a false declaration under the U.P. Sales Tax Act was held to require a knowingly or deliberately untrue statement, not a mere bona fide mistake. Where Form 31 was signed in blank and later misused by a common transporter for another concern, the record showed no guilty intent, dishonest conduct, or design to evade tax, and the dealer itself reported the error to the department. On those facts, the penalty was not attracted and the order imposing it was unsustainable.

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Issues: Whether penalty under Section 15A(1)(h) of the U.P. Sales Tax Act, 1948 was sustainable where Form 31 was signed and handed over in blank and was later wrongly used by a common transporter for another concern.

Analysis: Clause (h) of Section 15A(1) applies where a dealer makes a false verification or declaration in connection with proceedings under the Act. The expression "false" was treated as importing something knowingly or deliberately untrue, not a mere incorrect or erroneous statement caused by an honest mistake. The Tribunal had not recorded any finding of guilty intent, mens rea, dishonest conduct, or any design to evade tax. The record also showed that the assessee itself detected the mistake and informed the department, while no benefit accrued to it from the wrong use of Form 31. The statutory scheme also shows that penalty is not automatic and is to be imposed only where the authority is satisfied, on relevant judicial considerations, that the case warrants it.

Conclusion: Penalty under Section 15A(1)(h) was not attracted on the facts, and the assessee was entitled to succeed.

Final Conclusion: The penalty order and the Tribunal's affirmation of it were unsustainable in law because the case disclosed a bona fide mistake rather than a false declaration made with guilty intent.

Ratio Decidendi: Penalty for making a false declaration under Section 15A(1)(h) requires a false statement made knowingly or with dishonest intent, and a bona fide clerical or accidental mistake without mens rea does not justify imposition of penalty.

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