Transport document irregularity alone cannot justify sales tax penalty when accounts show no evasion.

Penalty under section 29A of the Kerala General Sales Tax Act was held unsustainable where the assessee had duly accounted for the sales in its books and the enquiry disclosed no actual or attempted tax evasion. The provision was treated as limited to interception and verification of transport documents for checking evasion, so a mere irregularity in the accompanying documents could not justify penalty in the absence of a finding of concealment or evasion. As the materials showed that tax had been paid and the transactions were reflected in the regular accounts, penalty was not leviable.

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Issues: Whether penalty under section 29A of the Kerala General Sales Tax Act, 1963 could be sustained when the assessee had accounted for the sales in its books and the authorities found no tax evasion.

Analysis: Section 29A authorises interception and verification of transport documents for the limited purpose of satisfying the officer that there is no evasion of tax. Mere irregularity in the accompanying transport documents, without a finding of actual or attempted evasion, is insufficient to sustain penalty. The fact that the sales stood accounted for in the regular books and the materials produced during enquiry established that tax had been paid and that there was no attempt to evade tax.

Conclusion: Penalty was not leviable and the orders imposing it were unsustainable.

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