Sales tax check-post penalty upheld as a valid anti-evasion measure within legislative competence.

Section 78(5) of the Rajasthan Sales Tax Act, 1994 was upheld as a valid machinery provision connected to the State's power to levy and collect sales tax. The Court held that the document-carrying requirement and penalty for non-compliance, including false or forged documents, were aimed at preventing tax evasion in the check-post and inspection scheme, and bore a reasonable and proximate connection to goods in transit. The fixed penalty was treated as a permissible deterrent within legislative competence, and the availability of a hearing before imposition supported procedural fairness. The constitutional and vires challenge therefore failed.

---

---

Issues: Whether section 78(5) of the Rajasthan Sales Tax Act, 1994, was ultra vires or unconstitutional on the ground that the penalty it imposed on the person in-charge of goods for non-compliance with the document-carrying requirement, or for false or forged documents, lacked legislative competence, was arbitrary, and was excessive.

Analysis: The provision formed part of a check-post and inspection scheme designed to prevent or check evasion of tax. It operated as a machinery provision incidental to the levy and collection of sales tax under the State's legislative power over taxes on the sale or purchase of goods. The requirement to carry documents and the consequence prescribed for breach were directed at persons connected with movement of goods liable to sale, and not at unrelated persons. The Court distinguished the provision from the invalidated Haryana provision in Sant Lal, noting that section 78(5) did not create a tax liability on transporters as such and did not suffer from the same absence of reasonable and proximate connection. The fixed penalty was treated as a deterrent measure within legislative competence, and the existence of a hearing before imposition of penalty addressed procedural fairness.

Conclusion: Section 78(5) was held to be valid and constitutional, and the challenge to its vires failed.

---