Transit rule breach alone does not justify penalty without proof of intention to evade tax.

Penalty for breach of transit requirements under section 15A(1)(o) of the U.P. Trade Tax Act, 1948 cannot be sustained on mere proof of violation of section 28A. Where the goods intercepted are the dealer's own raw material and the authorities record that the papers were left behind by mistake, the absence of intention to evade tax defeats penalty. Mere procedural non-compliance is insufficient without evidence of evasion, and the assessee succeeded on the factual findings accepted by the appellate authority and Tribunal.

---

---

Issues: Whether penalty under section 15A(1)(o) of the U.P. Trade Tax Act, 1948 was leviable merely because section 28A of the Act was violated, despite absence of intention to evade tax.

Analysis: The goods intercepted were found to be the dealer's raw material meant for manufacture, and the appellate authority as well as the Tribunal recorded concurrent findings that the relevant papers had been left behind by mistake. On these facts, the Court held that mere non-compliance with the transit requirement under section 28A did not by itself establish an intention to evade tax. The departmental challenge that penalty must follow automatically upon violation was rejected in view of the factual findings and the legal position applied by the Tribunal.

Conclusion: Penalty was not leviable in the absence of intention to evade tax, and the assessee succeeded.

Ratio Decidendi: A penalty for breach of transit requirements cannot be sustained unless the authorities establish an intention to evade tax; mere procedural violation is insufficient where the goods are otherwise shown to be the dealer's own raw material.

---