( 1. ) THIS is a reference under Section 44 of the Madhya Pradesh General Sales Tax Act. The applicant filed his return in 1961 for sales during the previous year. In that return he showed a turnover of Rs. 1,16,215 and 11 annas as sales of kutti machines, but he claimed that this turnover was exempt from tax as kutti machine was an agricultural implement. This view was at first accepted by the Board of Revenue in 1964, but later on it was reversed by the High Court, and the Supreme Court has also held that kutti machine is not an agricultural implement and, therefore, not exempt from tax. The applicant has however been assessed to sales tax on this turnover and the sales tax authorities have also imposed a penalty of Rs. 900 under Section 43 (1) of the Act.

( 2. ) THE applicant contended that his case was not covered by Section 43 (1) of the Act and no penalty could, therefore, be imposed. The following question has accordingly been referred to this court : Whether, under the facts and circumstances of this case, the applicant furnished false returns and also whether the penalty of Rs. 900 under Section 43 (1) of the Act was legal and justified?

( 3. ) AFTER hearing learne