The requirement of mens rea for the commission of an offence under S.10(b) of the Central Sales Tax Act, and the distinction between negligent representation and fraudulent representation.

1. The petitioner in this writ petition is a firm registered under the Indian Partnership Act. The affidavit on behalf of the petitioner has been filed by the senior partner of the firm. The petitioner is doing business in rice, sugar, chillies, chemicals, paints and other goods. The petitioner applied for registration under S.7 of the Central Sales Tax Act, 1956 to the Sales Tax Officer, Ernakulam. That was granted and a certificate, marked Ext. P1, was issued in favour of the petitioner. Ext. P1 states:

"The class(es) of goods specified for the purposes of sub-section (1) of S.8 of the said Act is/are as follows and the sales of these goods in the course of Inter State trade to the dealer shall be taxable at the rate specified in that sub-section subject to the provisions of sub-section (4) of the said section.

(a) For sale.

Provisions, rice, sugar, chillies, etc."

In the course of the assessment proceedings for the year ending 31-12-1962 the respondent issued a notice dated 29-12-1962 (a copy of which is marked Ext. P2 in the case) to the firm stating that the firm has during the year 1961-62 used'C' Form declarations for inter-state purchase of certain goods which are not covered by the class or classes of goods specified in the certificate of registration and has thereby committed an offence under S.10 (b) of the Central Sales Tax Act. Ext. P2 notice states:

"You have thus used 'C' form declarations for the inter-state purchase of goods which are not covered by the class or classes of goods specified in the Certificate of Registration issued to you under the Central Sales-tax Act and have thereby committed an offence punishable under S.10 (b) of the Central Sales-tax Act, 1956. It is therefore proposed to impose on you under S.10 A of the said Act, a penalty of Rs. 23,170.35 which is equal to 101/2 percent of the cost price of the goods you purchased inter-state by the unauthorised use of the 'C' form declarations."

The petitioner submitted its objection to the proposed penalty by a reply dated 7-1-1963, a copy of which is marked Ext. P3. In Ext. P3 it was stated that the addition of the word 'etc.' in Ext. P1, was intended to include all categories and classes of goods in which the petitioner-firm was doing business. The goods mentioned in Ext P. 2 notice as having been purchased by the firm by unauthorised use of the'C' Form declarations are:

"(1) Paints,

(2) Water paper,

(3) Polishing cloth,

(4) Water polish,

(5) Gamaxine,

(6) Tarpolin,

(7) Chair,

(8) Fire Extinguisher,

(9) Sulphuric acid."

It was further stated in the reply that even if, as a matter of fact, these goods would not come within the category of goods mentioned in Ext. P1, since the firm was under the bona fide belief that these goods were covered by the registration certificate it has not committed any offence and that even if an offence has been committed, the penalty proposed was excessive. The respondent by his order Ext. P4 has found that the goods purchased by the petitioner were not covered by Ext. P1 certificate and that the word 'etc.' can only take in items that can be classed among provision as sugar and chillies and not items like paints and varnishes, and that even if these statements in the 'C' form declarations were made negligently or inadvertently, with no intention to defraud or cheat, the petitioner would be liable for the penal consequences envisaged by the section. He therefore held that the petitioner was guilty of an offence under S.10(b) of the Act and imposed a penalty of one percent of the cost of the goods purchased instead of 101/2 percent as proposed in the notice and levied a penalty of Rs. 2,206.70.

2. It is alleged in the affidavit in support of the writ petition that the partners in the firm believed that Ext. P1 registration certificate was comprehensive enough to include all categories and classes of goods which the firm was purchasing from outside the State, and that it was in that belief that the firm was making the purchase