TMI Blog1979 (10) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... hown in the returns and the Assistant Commissioner of Sales Tax was not justified in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9, sub-section (2), of the Central Sales Tax Act, 1956. We accordingly reject the appeals in so far as they are directed against the inclusion of the amount of freight in the taxable turnover of the assessee, but allow the appeals in so far as they relate to imposition of penalty and set aside the orders passed by the Assistant Commissioner of Sales Tax imposing penalty on the assessee. - Civil Appeal No. 191, 192, & 193 of 1978 - - - Dated:- 30-10-1979 - BHAGWATI P.N. AND PATHAK R.S. JJ. V.S. Desai, Senior Advocate (C.A. No. 191 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, he passed two orders of assessment, one under the Central Sales Tax Act, 1956, and the other under the Madhya Pradesh General Sales Tax Act, 1958, including the amount of freight in the taxable turnover of the assessee and levying tax upon it and also imposing heavy penalty on the assessee on the ground that the assessee had failed to disclose in its returns the amount of freight as forming part of the taxable turnover. The same position obtained also in regard to the assessment period 15th November, 1971, to 31st July, 1972, and a similar order bringing the amount of freight to tax and imposing heavy penalty on the assessee was passed by the Assistant Commissioner of Sales Tax under the Madhya Pradesh General Sales Tax Act, 1958. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was includible in the taxable turnover of the assessee. The definition of "sale price" in section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958, is materially in the same terms as section 2(p) of the Rajasthan Sales Tax Act, 1954, and this decision must therefore equally apply under the Madhya Pradesh General Sales Tax Act, 1958, and it must be held that the amount of freight formed part of the "sale price" within the meaning of the first part of the definition of that term in section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958, and section 2(h) of the Central Sales Tax Act, 1956, and was rightly included in the taxable turnover of the assessee. We may point out that the observations made by this Court in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover. This 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 that it was not liable to include the amount of freight in the taxable turnover could not be said to be mala fide or unreasonable. What section 43 of the Madhya Pradesh General Sales Tax 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonafide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the Court to be not acceptable. That surely could never have been intended by the legislature. We are therefore, of the view that the assessee could not be said to have filed "false" returns when it did not include the amount of freight in the taxable turnover shown in the returns and the Assistant Commissioner of Sales Tax was not justified in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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