Transit penalty under section 28-A cannot rest solely on an expired export permit where prescribed documents accompany the goods.

Section 28-A(4) of the Karnataka Sales Tax Act, 1957 permits penalty only for specified contraventions in transit, such as non-compliance with the prescribed document requirements or circumstances indicating tax evasion. Where the goods vehicle carried the requisite documents, there was no contravention of sub-sections (2), (3), (3A) or (3B), and no material showing an attempt to evade tax, the mere expiry of an export permit did not justify penal action. The check-post officer's inference was held to be conjectural and beyond jurisdiction, and the earlier interpretation of section 28-A was followed.

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Issues: Whether penalty under section 28-A(4) of the Karnataka Sales Tax Act, 1957 could be levied when the vehicle carried the prescribed documents, there was no contravention of the relevant sub-sections, and the only basis for action was that the export permit had expired.

Analysis: Section 28-A is intended to prevent evasion of tax by regulating transit of goods and empowering the check-post to act where there is contravention of the requirements in sub-sections (2), (3), (3A) or (3B), or where the declaration or records do not tally with the goods actually transported. On the facts, the goods vehicle carried the requisite documents and there was no finding of failure to produce those documents, no contravention of sub-sections (3), (3A) or (3B), and no material showing an attempt to evade tax. The mere circumstance that the export permit had expired did not by itself establish misuse of the permit for transit or justify invoking the penal power under section 28-A(4). The authorities' inference was held to be conjectural and unsupported by evidence, and the check-post officer was held to have exceeded his jurisdiction. The earlier view construing section 28-A similarly was followed.

Conclusion: Penalty under section 28-A(4) could not be sustained on these facts, and the levy was without jurisdiction.

Final Conclusion: The revision succeeded and the penalty order of the authorities below was set aside.

Ratio Decidendi: The penal power under section 28-A(4) of the Karnataka Sales Tax Act, 1957 can be exercised only for the specified contraventions connected with transit documents or tax evasion, and not merely because an export permit has expired when the prescribed documents accompany the goods and no evasion is shown.

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