Penalty for transport-form violation set aside where documents matched the goods and the transaction was treated as an inter-State sale.

Penalty under the U.P. Trade Tax Act could not be sustained where the consignment moved under form XXXI issued by the purchasing corporation, the lorry receipts and endorsements showed transfer of title during inter-State transit, and the documents accompanying the goods matched the detained consignment. The same goods were later accepted in assessment as an inter-State sale under the Central Sales Tax Act, so the foundation for alleging a transport or import-form violation was not proved. The penalty was therefore unjustified and liable to be set aside.

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Issues: Whether the penalty imposed for alleged violation of the goods-importing and transport provisions was sustainable when the consignment moved pursuant to the transaction with the purchasing corporation, the accompanying documents matched the goods, and the transaction was treated as an inter-State sale.

Analysis: The revision arose from penalty proceedings under the U.P. Trade Tax Act. The goods were moved against form XXXI issued by the purchasing corporation, the lorry receipts and endorsements showed movement of title during inter-State transit, and the goods described in the accompanying documents tallied with the goods detained at the check-post. The assessment order for the same goods later accepted the transaction as an inter-State sale under the Central Sales Tax Act. On these facts, the foundation for treating the movement as a violation attracting penalty was not made out.

Conclusion: The penalty was unjustified and was liable to be set aside.

Ratio Decidendi: Where the documents accompanying the consignment are consistent with the goods transported and the transaction is supported as an inter-State sale, penalty for alleged violation of the transport or import-form provisions cannot be sustained absent a proved statutory infraction.

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