Penalty under sales tax transport provisions requires proof of conscious tax evasion, not mere document defects or suspicion.

Penalty under section 29A(4) of the Kerala General Sales Tax Act was held to require proof, after inquiry, of a conscious and definite attempt to evade tax; mere defects in transport documents or suspicion at the interception stage are insufficient. The court drew a clear distinction between detention of goods under section 29A(2), which may rest on improper or incomplete documents and suspicion of evasion, and penalty under section 29A(4), which depends on established evasion intent. As the goods had already suffered tax at the first sale, the transaction was a second sale, and no conscious attempt to evade tax was proved, the penalty orders were set aside.

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Issues: Whether penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 was sustainable on the facts of the case.

Analysis: Section 29A(2) permits detention of goods in transport where the accompanying documents are not proper and genuine or where there is reason to suspect an attempt to evade tax. Section 29A(4), however, authorises imposition of penalty only after inquiry finds that there has been an attempt to evade tax due under the Act. The distinction is material: mere incompleteness of documents or a suspicion at the stage of interception does not by itself justify penalty. The authority must find a conscious and definite attempt to evade tax. On the facts, the goods had already suffered tax at the first sale, the transaction was a second sale, and the record did not establish any conscious attempt by the petitioner to evade tax.

Conclusion: Penalty under section 29A(4) was not attracted and the orders levying penalty were set aside in favour of the assessee.

Ratio Decidendi: Penalty under section 29A(4) can be imposed only on proof of a conscious and definite attempt to evade tax; a mere defect in the transport documents or a suspicion at the stage of interception is insufficient.

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