Distinct penalty and compulsory purchase proceedings do not merge; payment remains obligatory once purchase under the statute is invoked.

Proceedings for penalty on goods in movement and proceedings for compulsory purchase under the Rajasthan Sales Tax Act operate on distinct legal bases. Section 78(5) is a preventive penalty provision for movement without proper documents or with false documents, while section 83 creates an independent mechanism for purchase of goods at the declared price with statutory increase where the officer considers the value understated. Once notice under section 83 is issued and the dealer is required to sell, the sale is complete and payment becomes obligatory. The penalty proceedings do not merge with, or extinguish, the statutory duty to pay for the goods.

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Issues: Whether proceedings for penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 merged with proceedings for purchase and payment under section 83 of the same Act, and whether the department was bound to pay the price of the goods seized and detained.

Analysis: Section 78 is a preventive provision intended to curb tax evasion and authorises seizure and imposition of penalty where goods in movement are without proper documents or accompanied by false or forged documents. Section 83 operates on a different footing and empowers the department to purchase goods from the dealer in the prescribed manner at the declared price with the statutory increase where the officer believes the shown value is below market value. Once notice under section 83(1) is issued and the dealer is required to sell under section 83(2), the sale becomes complete and payment becomes obligatory. The two provisions serve different purposes and proceed on different legal bases, so the plea of merger was rejected.

Conclusion: The proceedings under sections 78(5) and 83 were distinct, the State was bound to pay for the goods, and the direction to make payment was upheld in favour of the dealer.

Final Conclusion: The special appeal failed because the department could not avoid its statutory obligation to pay the price of goods after electing to proceed under section 83, and the penalty proceedings under section 78(5) did not extinguish that liability.

Ratio Decidendi: Where the statute creates separate proceedings for penalty on contravention and for compulsory purchase of goods, the initiation or pendency of penalty proceedings does not merge with or cancel the independent obligation to pay the price under the purchase provision.

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