Penalty cannot rest on transporter's omission where an out-of-State purchaser is not shown liable under the sales tax law.

Penalty under section 13-A(4) of the U.P. Sales Tax Act could not be imposed on an out-of-State purchaser merely because the transporter failed to carry proper documents or produce the builty book. The authorities made no enquiry into whether the sale had been duly recorded by the selling dealer, and the petitioner was not shown to be carrying on business in Uttar Pradesh or otherwise liable to tax under the Act. Delay in producing documents was attributed to detention of the truck and the transporter's office timings, so the transporter's omission could not be fastened on the purchaser. The penalty orders were therefore quashed.

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Issues: Whether penalty under section 13-A(4) of the U.P. Sales Tax Act could be levied on an out-of-State purchaser for the transporter's failure to carry the goods with proper documents and for alleged defects in the transaction papers.

Analysis: The goods had been purchased by the petitioner from a dealer at Moradabad and were in transit out of the State. The authorities did not make any enquiry to ascertain whether the sale was duly recorded by the selling dealer. The petitioner was only a purchaser and was not shown to be carrying on business in Uttar Pradesh or to be liable to tax under the Act. The delay in producing documents was attributable to the detention of the truck and the transporter's office timings, and the transporter's failure to produce the builty book could not be fastened on the petitioner. In these circumstances, penalty proceedings could not be sustained against the petitioner merely on the basis of the transporter's omission.

Conclusion: Penalty under section 13-A(4) was not justified against the petitioner, and the impugned penalty orders were liable to be quashed.

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