I don't know if I'd say that he new his dog came back evil, but more aggressive. If I remember correctly, after the incident with his mom, she made him keep the dog outside, but he went on to "live" another several years before dying of "natural" causes a second time. So from Jud's perspective, the dog came back different, but not definitively evil.

Also, I think his hope is that by burying Church asap, the differences in the cat could be mitigated.

I don't think Jud himself is evil, he's well intentioned.