Penalty for transit without documents requires proper enquiry and intent to evade tax, not automatic levy.

Penalty under section 22A(7) of the Rajasthan Sales Tax Act, 1954 is not automatic merely because goods were transported without accompanying documents. The provision is preventive and quasi-criminal in character, so the authority must consider the surrounding circumstances, the genuineness of later-produced documents, and whether the breach was technical or carried a culpable intent to evade tax. Mens rea and proper enquiry remain relevant, and the revenue bears the burden of establishing the basis for penalty. Later production of documents does not by itself prove ante-dating or deliberate default. On the stated analysis, penalty was not sustainable where no proper enquiry into these matters was made.

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Issues: Whether penalty under section 22A(7) of the Rajasthan Sales Tax Act, 1954 was sustainable for transport of goods without accompanying documents, and whether such penalty required consideration of mens rea and enquiry into the genuineness of later-produced documents.

Analysis: Section 22A was held to be a preventive provision aimed at checking tax evasion, but not one under which penalty follows automatically in every case of transit without documents. The requirement of notice and further enquiry was treated as meaningful only if the authority could examine whether penalty was actually leviable on the facts, including whether the breach was merely technical or was committed deliberately with intent to evade tax. The penalty provision, being quasi-criminal in nature and carrying a heavy maximum levy, was held to require consideration of the surrounding circumstances and the existence of mens rea. The later production of documents did not, by itself, justify an inference of ante-dating or deliberate default, and the burden remained on the Revenue to establish the basis for penalty. The authorities were found to have levied penalty without proper enquiry into the genuineness of the documents and without examining whether the petitioner had acted with any contumacious or dishonest intent.

Conclusion: Penalty was not sustainable. The revision was allowed and the orders imposing and affirming penalty were quashed.

Ratio Decidendi: Under section 22A(7) of the Rajasthan Sales Tax Act, 1954, penalty for transit of goods without requisite documents is not automatic and can be imposed only after a proper enquiry showing a culpable breach with intent to evade tax, or other circumstances justifying the levy.

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