STATE OF A P Vs. DHANALAKSHMI RICE MILL

JUDGEMENT

(1.) THIS T. R. C. preferred by the State is directed against the order of the Sales Tax Appellate Tribunal deleting the penalty levied by the Commercial Tax Officer under sub-section (8) of section 14 of the Andhra Pradesh General Sales Tax Act. During the course of assessment, the Commercial Tax Officer found that certain turnover has been not disclosed by the assessee and accordingly included it. He took proceedings for levying penalty and finding that the non-disclosure was wilful, levied penalty in a sum five times the tax evaded. On appeal, the first appellate authority, while confirming the finding, reduced the penalty to two times. On appeal, however, the Tribunal found that out of the five items of additions made by the Commercial Tax Officer, three items could not have been added. So far as the question of penalty is concerned, the Tribunal found that inasmuch as the major additions have been deleted by it and also because it cannot be said that there was mens rea on the part of the dealer in seeking to suppress the turnover, the penalty cannot be allowed to stand. The assessment concerned here is of 1975-76. Sub-section (8) of section 14 of the Act reads as follows :

(2.) THE sub-section contains two clauses. Clause (a) empowers levy of penalty up to five times the tax or fee evaded in cases where the failure of the dealer to disclose whole or part of the turnover or any other particulars correctly or to submit the return before the prescribed date is found to be "wilful". Clause (b) deals with a case where such failure is found to be "not wilful". The proviso which evidently can govern only clause (b) [but not clause (a)] says that where the failure is not wilful and it is also found that the failure occurred due to a bona fide mistake, no penalty shall be levied. The proviso cannot govern clause (a) because wilful failure to disclose and bona fide mistake cannot co-exist. Be that as it may, we are satisfied that unless the failure to disclose is found to he wilful, clause (a) is not attracted. In this case, the deletion of major items of additions and also the observations of the Tribunal in the course of its judgment justified its finding that there was no wilful failure on the part of the dealer to disclose a part of his turnover. Once the said finding is said to be unexceptionable, the levy of penalty was rightly removed.