Before levying penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954, all the circumstances of the case have to be taken into consideration in the penalty proceedings and if from those circumstances conscious concealment or deliberate furnishing of inaccurate particulars are established then and then only penalty can be imposed.

MAL LODHA, J. - This reference application has been filed by dealer-assessee for directing the Board of Revenue for Rajasthan at Ajmer ("the Board" herein) to refer the question of law arising out of its order dated 27th August, 1980, passed in case No. 2/77/Revision/ST/Sriganganagar as it erroneously reject its application under section 15(1) of the Rajasthan Sales Tax Act, 1954 (No. 29 of 1954) ("the Act"), by its order dated 24th May, 1981. It has been prayed by the dealer-assessee that the Board may be directed to refer the following questions of law which arise out of its order dated 27th August, 1980 :

"1. Whether, in the facts and circumstances of the case, the learned Members of the Revenue Board were not justified in maintaining the penalty levied under section 16(1)(e) of the Act without applying their judicial mind whether there was mens rea and the petitioner was guilty of international evasion of the tax, especially when the assessment had taken place on the basis of the revised trading account and the return filed by the petitioner ?

2. Whether, in the facts and circumstances of the case, the learned Members of the Board committed an apparent error in maintaining the quantum of penalty without applying their judicial mind as to what penalty would meet the ends of justice looking to the background of the petitioner and further the fact that he had filed the revised trading account and the return before the assessment and the assessment had taken place on the basis of the revised return filed by the petitioner ?

3. Whether, in the facts and circumstances of the case, when the learned Members of the Revenue Board held that the penalty imposed by the Commercial Taxes Officer was illegal being more than the twice leviable under section 16(1)(e) of the Act, it was not open to the non-petitioners Nos. 1 and 2 to modify that penalty so as to reduce it to the maximum leviable under section 16(1)(e) of the Act and thus committed an error because non-petitioners Nos. 1 and 2 ought to have sent back the case to the Commercial Taxes Officer to levy proper penalty. In any case they ought to have applied their judicial mind to determine as to what penalty should have been levied to meet the ends of justice in the circumstances of the case ?"

The Rajasthan Sales Tax (Amendment) Act, 1984 (No. 20 of 1984) (for short "the Amendment Act"), came into force from 1st May, 1985. According to section 13(10) of the Amendment Act the application which was pending for a direction to the Board for making reference is to be treated as a revision and is to be disposed to under section 15 of the Act as substituted by the Amendment Act. A revision under section 15 of the Act lies only on questions of law.

We have heard the learned counsel for the petitioner as well as the learned counsel for the sales Tax department.

The only question of law that arises for our determination in this application is whether the Board was right and justified in maintaining the levy of penalty under section 16(1)(e) of the Act for the alleged concealment of particulars from the return furnished by the dealer-assessee for the accounting period 1st October, 1970, to 30th September, 1971, i.e., in respect of the tax assessment for the year 1971-72. It was detected by the assessing authority that the dealer-assessee had furnished inaccurate particulars in the returns that were filed and concealed his taxable turnover to the extent of Rs. 9,64,100.91 which relates to the taxable sales within the State attracting tax to the tune of Rs. 28,924.92. As per trading account the dealer-assessee has shown these transactions as inter-State purchases for and on behalf of another dealer, M/s. Gill & Co. (P.) Ltd., Sriganganagar, and was thus liable to tax under the Central Sales Tax Act. M/s. Gill and Co. (P.) Ltd. had not paid any Central sales tax relating to these purchases on the ground that all the purchases made by it were of Rajasthan sales tax-paid goods. In fact,