V. K. SINGHAL, J. - (1.) THE revision petition has been filed under section 15 of the Rajasthan Sales Tax Act, 1954 and the following question of law has been raised for the decision of this Court : Whether, in the facts and circumstances of the case, the Tribunal was justified in setting aside the penalty under section 16 (1) (e) of the Act ? Brief facts giving rise of the present revision are that the Commercial Taxes Officer (A. E.) visited the premises of the assessee on 17th January, 1989 and found that the imported liquor of Rs. 1,85,199. 77 has been sold by the assessee, which has been shown as tax-free in the return. THE assessee has submitted the revised return on 24th January, 1989 and has also deposited the tax. THE assessing authority considered that this return has not been submitted within the time stipulated under section 7 (3) of the Act and, therefore, held that the assessee has committed offence by not disclosing the turnover as taxable in the return and as such levied penalty under section 16 (1) (e) of the Act. An appeal was preferred to the Deputy Commissioner (Appeals) which was rejected and thereafter second appeal was preferred to the Sales Tax Tribunal. Before the Sales Tax Tribunal, it was contended that the assessee is dealing in Indian made foreign liquor (IMFL) and this foreign liquor was purchased from Delhi, where it was tax free. THE purchases were duly entered in the books of accounts and the sales were also shown. THE assessee was under bona fide belief that the foreign liquor is not liable to tax and as such has not collected even the tax on the sales thereof. THE Tribunal after considering the judgment of this Court in the case of Commercial Taxes Officer v. Sojat Lime Co. [1989] 74 STC 288 has set aside the penalty. THE judgment in the case of Murarilal Ahuja & Sons [1986] 61 STC 393 (Raj) was also referred to.
(2.) THE provisions of section 16 (1) (e) of the Rajasthan Sales Tax Act are as under : " 16. Offences, penalties and prosecutions, etc.- (1) If any person - (e) has concealed any particulars from any return furnished by him or has deliberately furnished inaccurate particulars therein. . . . . . . . " If any person has concealed any particulars from any return furnished by him or has deliberately furnished inaccurate particulars therein, then the is liable for penalty in addition to the tax payable by him, if any, which could have been avoided if returns furnished by such person had been accepted as correct. The provisions of section 16 (1) (e) are in two parts : (i) has concealed any particulars from any return furnished by him; and (ii) has deliberately furnished inaccurate particulars therein. Both these clauses contemplate that there must be concealment to the knowledge of the assessee involving mental element, i. e. , the act of not showing particulars in the return or showing inaccurate particulars in the return, must be with deliberate intention. The word "concealment" referred in the first part also implies the mental element of assessee for the purpose of committing the offence and if there is no mental element then simply because the particulars in the return have not correctly been shown, it cannot be said that the offence has been committed. Similarly "deliberately furnishing of inaccurate particulars" also refers to the mental state of assessee, in which it could be said that the act has been done deliberately. There may be instances were because of ignorance of law or on improper understanding of law or on wrong interpretation of law, the assessee may not consider that part of the turnover as taxable. There may be bona fide dispute with regard to taxability itself. All such cases are of the nature, where no mental element can be said to be existing. The assessee may take a bona fide legal plea that a particular transaction is not liable to tax or it may happen that the taxability of the item is not shown based on a bona fide mistake as in the present case. The assessee has not collected any tax which itself is a proof that he has considered the foreign liquor falling within the category of Indian made foreign liquor. The Honorable Supreme Court has held in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 that an order imposing penalty for failure to carry out a statutory obligation is the result of quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in conscious disregard of its obligation. The penalty will also not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed the authority competent to impose the penalty will be justified in refusing to impose penalty. The act of assessee in revising the return immediately after inspection shows his bona fide that he was not aware of the taxability of the item and, therefore, there was bona fide dispute in his mind. Besides this, this Court has taken a view in the case of Sojat Lime Co. [1989] 74 STC 288 that where the transaction is recorded in the books of accounts of the assessee, it cannot be said that the assessee consciously concealed the particulars or furnished inaccurate particulars. The Tribunal has come to the conclusion that there was bona fide belief in the mind of the assessee regarding the taxability of foreign liquor as Indian made foreign liquor, which was exempt in Rajasthan and the exemption was claimed in the return as this foreign liquor was purchased by the assessee from Delhi as tax-free. This being the position, I am of the view that the Tribunal was justified in setting aside the penalty. Consequently, the revision petition has no force and is dismissed. Petition dismissed. .;