Mens rea is required for penalty on technical breach of transit declaration requirements under sales tax law

Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 was treated as dependent on a contravention accompanied by mens rea, not as an automatic consequence of every breach of section 78(2). Where goods were intercepted without the ST-18C declaration form but the remaining documents were genuine and the declaration was later produced with the reply to the show cause notice, no mala fide intention or intent to evade tax could be inferred. The mere technical absence of the form at the time of checking was therefore insufficient to justify penalty on the facts noted.

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Issues: Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be imposed automatically for breach of section 78(2) when the declaration form ST-18C was not found accompanying the goods at the time of checking, and whether mens rea was necessary for such penalty.

Analysis: The goods were intercepted without the declaration form, but the remaining documents were found genuine and correct, and the declaration form was produced later along with the reply to the show cause notice. On the concurrent findings recorded by the appellate authorities, no mala fide intention or intention to evade tax could be inferred. Penalty for breach of section 78(2) was held to be attracted only when the contravention was accompanied by mens rea, and a mere technical breach did not justify automatic levy of penalty under section 78(5).

Conclusion: Penalty under section 78(5) was not exigible on the facts found, and the revision petition failed.

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