Mens rea required for sales tax penalty where transport-document breach was only technical and not aimed at tax evasion.

Penalty under the Rajasthan Sales Tax Act for non-compliance with transport-document requirements was held not to arise automatically from the absence of the prescribed declaration form. Where the remaining documents were valid and the form was later produced, the breach was treated as technical rather than deliberate. The governing principle stated is that mens rea is required for penalty when the default is not shown to be intended to evade tax, so a mere procedural lapse does not justify mechanical imposition of penalty. On those facts, the assessee's challenge succeeded and no substantial question of law was found to arise.

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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) of the Rajasthan Sales Tax Act, 1994 without proof of mens rea.

Analysis: The goods were intercepted without the declaration form, but the remaining documents were found to be valid and the declaration form was later produced with the reply to the show-cause notice. On these facts, the contravention was treated as technical rather than deliberate. The governing principle applied was that mens rea is an essential ingredient for levy of penalty where the breach is not shown to be intended for tax evasion, and penalty cannot follow mechanically from a mere procedural lapse.

Conclusion: Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 was not attracted in the absence of mens rea, and the finding in favour of the assessee was upheld.

Final Conclusion: The revision failed because no substantial question of law arose from the Tax Board's view that the default was only technical and did not justify penalty.

Ratio Decidendi: A penalty provision for breach of transport-document requirements under the sales tax law is not automatically attracted by mere non-accompaniment of the prescribed form; it requires proof of mens rea or an intention to evade tax.

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