Offences and Penalties

1. (1) Whoever, not being a registered dealer falsely represents that he is or was a registered dealer at the time when he sells or buys goods shall, on conviction, be

punished with imprisonment for a terms which shall not be less than six months

which may extend to one year or with fine not exceeding two thousand rupees or both.

1. (2) Whoever, knowingly furnishes a false return shall, on conviction, be punished -
   • (i) in case where the amount of tax, which could have been evaded if the false return had been accepted as true, exceeds ten thousand rupees with imprisonment for a term which shall not be less than six months, which may

extend to one year or with fine not exceeding five thousand rupees or both;

1. (ii) in any other case, with imprisonment for a term, which shall not be less than three months, which may extend to six months or with fine or both;

1. (3) Whoever, knowingly produces before the prescribed authority, false bill, cash- memorandum, voucher, declaration, certificate or other document for evading tax payable under this Act shall on conviction, be punished -
   • (i) in case where the amount of tax which could have been evaded, if the documents referred to above had been accepted as true, exceed fifty thousand rupees during the period of a year, with imprisonment for a term which shall not be less than six months which may extend to one years or with fine not exceeding five thousand rupees or both;
   • (ii) in any other case, with imprisonment for a term which shall not be less than three months, which may extend to one year or with fine or both;
2. (4) Whoever, knowingly keeps false account of the value of the goods bought or sold by him in contravention of the provisions of this Act, shall, on conviction, be punished with imprisonment for a term which shall not be less than three months, which may extend to three years or with fine not exceeding five thousand rupees or both;
3. (5) Whoever, knowingly produces false accounts, registers or documents or knowingly furnishes false information, shall, on conviction, be punished –
   • (i) in case where the amount of tax which could have been evaded, if the accounts, registers or documents or information referred to above had been accepted as true, exceeds fifty thousand rupees during the period of a year, with imprisonment for a term which shall not be less than six months, which may extend to three years or with fine not exceeding five thousand rupees or both;
   • (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months, which may extend to one year or with fine or both;
4. (6) Whoever, issues to any person certificate or declaration under the Act, rules or notifications or a false bill, cash-memorandum, voucher, delivery Challan, lorry receipt or other document which he knows or has reason to believe to be false, shall, on conviction, be punished with imprisonment for a term which shall not be less than six months, which may extend to one year or with fine not exceeding five thousand rupees or both;
5. (7) Whoever, -
   • (i) willfully attempts, in any manner whatsoever, to evade any tax leviable under this Act, or
   • (ii) willfully attempts, in any manner whatsoever, to evade any payment of any tax, penalty or interest or all of them under this Act or shall on conviction, be punished -
   • (a) in case where the amount involved exceeds fifty thousand rupees during the period of a year, with imprisonment for a term which shall not be less than six months, which may extend to three years or with fine not exceeding ten thousand rupees or both;
   • (b) in any other case, with imprisonment for a term which shall not be less than three months, which may extend to one year or with fine or both;
6. (8) Whoever aids or abets or induces any person in commission of any act specified in sub- Sections (1) to (7) shall, on conviction, be punished with rigorous imprisonment which shall not be less than six months, which may extend to one year or with fine not exceeding two thousand rupees or both;
7. (9) Whoever -
   • (a) is engaged in business as a dealer without being registered in willful contravention of Section 25, or
   • (b) fails without sufficient cause to furnish any returns as required by Section 29 or 75 by the date and in the manner prescribed,
   • (c) fails without sufficient cause, when directed to keep any accounts or record, in accordance with the provisions of this Act, or
   • (d) fails without sufficient cause, to comply with any requirements made of him under Section 71, or
   • (e) voluntarily obstructs any officer making inspection or search or seizure under Section 70 and 72, shall, on conviction, be punished with imprisonment for a term which may extend to one year or with fine or both.
8. (10) Whoever fails, without sufficient cause, to furnish any return by the date and in the manner prescribed under this Act shall on conviction, be punished with simple imprisonment for a term which may extend to six months or with a fine, which shall not be less than,
   • (i) rupees two thousand, if the tax due for the period covered by the return does not exceed rupees twenty thousand or both;
   • (ii) rupees five thousand, if the tax due for the period covered by the return exceeds rupees twenty thousand but does not exceed rupees one lakh or both;
   • (iii) rupees ten thousand, if the tax due for the period covered by the return exceeds rupees one lakh or both;
9. (11) Notwithstanding anything contained in sub-Sections (1) to (10), no person shall be

proceeded against these sub-Sections for the acts referred to therein if the total

amount of tax evaded or attempted to be evaded is less than two thousand rupees during the period of a year.

1. (12) Where a dealer is accused of an offence specified in sub-Sections (1) to (10) the person deemed to be the manager of the business of such dealer shall also be deemed to be guilty of such offence, unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission thereof.
2. (13) In any prosecution for an offence under this Section, which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state, but it shall be a defence for the accused to prove the fact that he

had no such mental state with respect to the act charged as an offence in that

prosecution. Explanation -Culpable mental state includes intention, motive or knowledge of fact or belief in, or reason to believe a fact and a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.