.,.,. !1fOund 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 was nuder a bonafide belief that the amount of freight did not form part of the sale price and was I not includible in the taxable turnover. The contention of the assessee tl1roughout was that on a proper construction of the definition of 'sale price' in section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and section 2(h) of the Central Sales Tax Act, 1956, the amount of freight did not fall within the definition and was not liable to be C included in the taxable turnover. Thisi was the reason why the assessee did not include the amount of freight in the taxable turnover in the returns filed by it. Now, it cannot be said that this was a frivolous contention taken up merely for the purpose of avoiding liability to pay tax. It was a highly arguable contention which required serious consideration. by the Court and the belief entertained by the assessee tha~ B it was not liable to include the amount of freight in the taxable furnover could not be said to be malafide or unreasonable. What section 43 o~ ' the Madhya Pradesh General Sales Ta;x Act, 1958 requires is that the assessee should have filed a 'false' return and a return cannot be said to be 'false' unless there is an element of deliberateness in it. It is possible that even where the incorrectness of the return is claim.ed to E be due to want of care on the part of the assessee and there is no reasonable explanation forthcoming from the assessee for such want of care, the Court may, in a given case, infer, deliberateness and 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 bonafide belief that he is not liable so to incltJde it, it would not be right P 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 OrissaC) 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 G penalty, when there is a technical venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offert...... der is not liable to act in the, manner prescribed by the statute ...... " '- It is elementary that section 43 of the Madhya , Pradesh General Sales Tax Act, 1958 providing for imposition of penalty is penal in character and unless the filing of an inaccurate return is accompanied H by a guilty mind, the section cannot be invoked for imposing penalty. If the view canvassed ,on behalf of the Revenue were accepted, the re(!) 25 S.T.C. 211.
