G.P. Singh, J.
1. This is a reference as stated by the Sales Tax Tribunal (Board of Revenue) at the instance of the Commissioner of Sales Tax. The facts stated are that the Bombay General Stores, Shahdol is a dealer registered under Section 7, Central Sales Tax Act, and in its certificate of registration certain goods are specified as being intended for re-sale. The dealer made purchases of goods specified in the certificate of registration and also goods not so specified on payment of concessional rate of tax after furnishing 'C' forms to the selling dealer. The Sales Tax Officer held that the dealer by making purchases of goods not specified in the certificate of registration on furnishing 'C' forms deprived the Government of its rightful revenue and committed the offence defined in Section 10(b) of the Act. Instead of prosecuting the dealer for the offence, the Sales Tax Officer imposed upon it a penalty of Rs. 2,500 as permissible under Section 10A of the Act. In appeal filed by the dealer to the Appellate Assistant Commissioner, the penalty was reduced to a sum of Rupees 1,500. The dealer then went up in second appeal to the Tribunal, which was allowed and the order of imposition of penalty was wholly set aside. The Tribunal held that although the dealer admittedly purchased certain goods under the cover of 'C' forms, which were not specified in the certificate of registration, still it could not be held liable for penalty as there was no finding that it falsely represented when purchasing the goods that they were covered by the certificate of registration. On application made by the Commissioner of Sales-tax, the following question of law has been referred by the Tribunal for our answer:--
'Whether the liability to penalty under Section 10A of the Central Sales Tax Act for contravention of Section 10(b) of the said Act arises ipso facto on a registered dealer importing goods not mentioned in its registration certificate as goods that he could import on furnishing the prescribed declarations and thus obtained a benefit of the concessional rate without further proof of mens rea.'
2. Under Section 8 of the Act, every dealer, who sells to a registered dealer goods specified in the certificate of registration of the purchasing dealer as being intended for resale by him or for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power, gets the advantage of a concessional rate provided he furnishes to the assessing authority a declaration duly filed and signed by the dealer to whom the goods are sold containing the prescribed particulars in the prescribed form. The form relevant to this purpose is form 'C' which is prescribed by Rule 12 of the Central Sales Tax Rules, 1957. According to this form, the purchasing dealer certifies that the goods purchased are for re-sale, or use in manufacture etc., and are covered by registration certificate of the purchasing dealer. Section 10 of the Act provides for offences and Clause (b) of it, with which we are concerned, reads: 'Section 10. If any person-...
(b) Being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; or...
he shall be punishable with simple imprisonment which may extend to six months, or with fine, or with both; when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues.'
Instead of prosecuting any person guilty of any offence under Clauses (b), (c) or (d) Section 10, the authorities are empowered under Section 10A to impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax which would have been levied if the offence had not been committed. The penalty under Section 10A is in lieu of prosecution and can only be levied if an offence under Clauses (b), (c) or (d) of Section 10 is made out.
3. The question referred to us is not happily worded, but it is clear that it relates to the construction of the words 'falsely represents' as they occur in Clause (b) of Section 10, whether these words mean merely an incorrect representation or whether they cover only such representations which are made with a guilty mind that is to say which are knowingly, wilfully or intentionally false. According to Oxford Dictionary the word 'false' may mean 'erroneous, incorrect' or 'purposely untrue, deceitful etc.' In Pearl Assurance Company v. Bromley, (1931) 49 TLR 446 the words 'false representation' occurring in Section 3 of the Industrial Assurance Act, 1923 were construed as including any untrue statement, whether made innocently or fraudulently. Similarly in Joitabhai Patel v. Controller of Customs, 1965-3 All ER 543, 593 the words 'false entry' in Section 116 of the Customs Ordinance (Fiji) were construed by the Privy Council as meaning an incorrect or untrue entry including even an entry which was innocently made false.
In contrast to these cases, there are others where the word 'false' has been used to cover only intentional falsehoods. As stated in Black's Law Dictionary (p. 722):
'In Law, this word usually means something more than untrue; it means something designedly untrue and deceitful, and implies an intention to perpetrate some treachery or fraud. Hatcher v. Dunn, 102 Lowa 411=71 NW 343 = 36 LRA 689; Mason v. Association, 18 U. C. C. P. 19; State v. Leonard, 73 Or 451 = 144 P. 113, 118 and State v. Smith, 63 Vt 201 = 22 A 604. It implies either conscious wrong or culpable negligence, and signifies knowingly, negligently untrue. United State v. Ninety-Nine Diamonds, C. C. A. Minn 139 F 961 = CCA 9 = 2 LRA NS 185.
The word 'false' has two distinct and well recognised meanings: (1) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care. Metropolitan Life Ins. Co. v. Adams. Mun. App. 37 A 2d 345. 350. In jurisprudence, 'false' and 'falsely' are oftenest used to characterize a wrongful or criminal act such as involves an error or untruth, intentionally or knowingly put forward. A thing is called 'false' when it is done, or made, with knowledge, actual or constructive, that it is untrue or illegal, or is said to be done falsely when the meaning is that the party is in fault for its error. Fouts v. State. 113 Chio St. 450 = 149 NE 551. 554 and Monahan V. Mutual Life Ins. Co. of New York, 192 Wis 102 = 212 NW 269. The word 'false' in its juristic use implies something more than a mere untruth, Dombroski v. Metropolitan Life Ins. Co., 126 NLJ 545 = 19 Ad 2d 678. 680.
The word 'false' sometimes connotes an intent to deceive. People v. Wahl. 39 Cal App 771 = 100 P 2d 550, 551 and Salt's Textile Mfg Co. v. Ghent. 107 Conn 211 = 139 A 694. 595.'
It will thus be seen that the word 'false' may be used in a wider or a narrower sense. In wider sense it will embrace all types of falsehoods whether they be intentional or innocent but in narrower sense it will cover only such falsehoods which are intentional. The question whether in a particular enactment the word 'false' is used in a restricted sense or in a wider sense would depend on the context in which it is used. Clause (b) of Section 10 of the Central Sales Tax Act, with which we are concerned, uses the words 'falsely represents' as an ingredient of a criminal offence, for which a penalty of imprisonment which may extend to six months is prescribed. We begin with a presumption that a guilty intent is an essential element of a statutory offence and this presumption is strengthened when the offence is made punishable with a sentence of imprisonment. This presumption can be rebutted by showing that the object of the statute would be defeated unless the language used in the enactment is construed in a wider sense to include otherwise innocent persons: [Nathulal v. State of Madhya Pradesh. AIR 1966 SC 43 at p. 45]. The object of Section 10(b) is to protect the revenue by preventing misuse of registration certificates and we do not think, that this object would be defeated by construing the section as embracing the element of mens rea. In most cases it would not be in doubt that the article purchased under 'C' form is not entered in the registration certificate and in such cases it will be easy to infer that the false representation by furnishing the declaration in 'C' form was knowingly or intentionally made. But cases cannot be ruled out where it may be a matter of bona fide dispute whether a particular article purchased by a dealer fell within 'the class or classes of goods'' specified in his registration certificate.
There is nothing in the section to show that the legislature intended to punish a dealer who honestly though incorrectly represented that a particular article fell within the description of goods specified in his certificate. The presumption of existence of mens rea as a necessary constituent of the offence falling under Clause (b) of Section 10 is not rebutted by anything in its object or language and consistent with the presumption it must be held that the word 'false' is used in that clause in a restricted sense and does not exclude the element of mens rea. In our opinion, in the absence of mens rea a dealer cannot be penalised for contravention of Clause (b) of Section 10. The view that we have taken has also been taken by the Kerala High Court In Varghese and Sons v. Sales Tax Officer, 1965-16 STC 323 = (AIR 1965 Ker 212).
4. It was, however, urged by the learned Government Advocate that on the facts and circumstances of this case there could be no dispute whatsoever that some of the goods purchased by the dealer did not fall within the class or classes of goods entered in its certificate of registration and therefore, the dealer in furnishing 'C' form in respect of those goods must be held to have knowingly and falsely represented when purchasing the goods that goods of that class were covered by its certificate of registration and the requirement of mens rea was satisfied. All that we need say on this point is that on the frame of the question referred to us we are only required to answer whether mens rea is an element of the offence defined in Section 10(a) and we cannot further examine whether in the facts and circumstances of the case mens rea was present or absent.
5. For the reasons indicated above, our answer to the question referred to us is in the negative.