TaxTMI 
TaxTMI 
1979 (10) TMI 184
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....eave raise common questions of law and it would be convenient to dispose them of by a single judgment. The assessee effected certain transactions of sale of cement in accordance with the provisions of the Cement Control Order during the assessment period 1st August, 1971, to 31st July, 1972, and in the course of the assessment of the assessee to sales tax under the Madhya Pradesh General Sales Tax Act, 1958, and the Central Sales Tax Act, 1956, a question arose whether the amount of freight which was included in the "free on rail destination railway station" price, but which was paid by the purchasers and hence deducted from the price shown in the invoices sent to the purchasers, formed part of the sale price so as to be liable to be inclu....
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....ssee preferred appeals directly to this Court by special leave against the orders of assessment made by the Assistant Commissioner of Sales Tax. The assessee challenged in the appeals not only the inclusion of the amount of freight in the taxable turnover of the assessee, but also the imposition of penalty for not showing the amount of freight as forming part of the taxable turnover in the returns. So far as the first question is concerned, namely, whether the amount of freight formed part of the sale price and was includible in the taxable turnover of the assessee so as to be exigible to sales tax, it stands concluded by a recent decision given by this Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 S.T.C. 13 (S.C.); [....
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....order. The next question that arises for consideration is whether the Assistant Commissioner of Sales Tax was right in imposing penalty on the assessee for not showing the amount of freight as forming part of the taxable turnover in its returns. The penalty was imposed under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9, sub-section (2), of the Central Sales Tax Act, 1956, on the ground that the assessee had furnished false returns by not including the amount of freight in the taxable turnover disclosed in the returns. Now it is difficult to see how the assessee could be said to have filed "false" returns, when what the assessee did, namely, not including the amount of freight in the taxable turnover w....
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.... the return may be liable to be branded as a false return. But where the assessee does not include a particular item in the taxable turnover under a bona fide belief that he is not liable so to include it, it would not be right to condemn the return as a "false" return inviting imposition of penalty. This view which is being taken by us is supported by the decision of this Court in Hindustan Steel Limited v. State of Orissa [1970] 25 S.T.C. 211 (S.C.)., where it has been held that "even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief tha....