Friday, October 15, 2010

SC: PENALTY ONLY IN CASE OF FALSE INTENTION

In a breather to the assesses, the Supreme Court has ruled that revenue department cannot impose
penalty under provisions of the Central Sales Tax Act for furnishing incorrect representation without
proving the intention (mens rea) for false representation. The penalty in tax matters is to levied strictly in accordance with the intention of the statutes, said the apex court over-ruling an Allahabad High Court order. The bench is of the opinion that a finding of mens rea is a condition precedent for levying penalty under section 10(b) read with section 10A of the Central Sales Tax Act, 1956.

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