Technical breach of transit documents does not attract penalty without proof of mens rea or tax evasion intent.

Penalty for breach of transit documentation requirements under the Rajasthan Sales Tax Act was held unsustainable where the goods were accompanied by all material documents except form S.T. 18A. The breach was treated as technical, and the governing principle applied was that penalty for such non-compliance requires mens rea or some element of avoidance or evasion of tax. A mere procedural lapse, without proof of intention to evade, does not justify penalty. On that basis, the assessee succeeded and the penalty was not restored.

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Issues: Whether penalty for breach of section 22A of the Rajasthan Sales Tax Act, 1954 could be sustained in the absence of mens rea where the goods were accompanied by all documents except form S.T. 18A.

Analysis: The breach was treated as technical in nature because the goods were accompanied by the other relevant documents disclosing the material particulars required for transit. The settled principle applied was that, for imposing penalty for such a breach, mens rea or an element of avoidance or evasion of tax is necessary. A procedural lapse by itself does not justify penalty where the facts do not show an intention to evade tax.

Conclusion: Penalty under section 22A(7) could not be sustained in the absence of mens rea and the assessee succeeded on this issue.

Final Conclusion: The challenge to the Tribunal's order failed, and the penalty set aside by the Tribunal was not restored.

Ratio Decidendi: For a technical breach of transit requirements under section 22A of the Rajasthan Sales Tax Act, 1954, penalty is not leviable unless the authority establishes mens rea indicating avoidance or evasion of tax.

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