Later production of ST 18C defeated transit penalty despite initial non-carrying of the declaration form.

Failure to carry declaration form ST 18C with goods at the time of checking was treated as a breach of the transit requirement, but that omission did not justify penalty where the form was later produced before the assessing officer in reply to the show-cause notice. Fairness and natural justice supported giving the assessee an opportunity to furnish the document, and later production was accepted as sufficient to defeat penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994. The view that penalty could not be imposed on the goods owner was not accepted, but the ultimate result remained that the penalty was unsustainable.

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Issues: Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 was sustainable when the declaration form ST 18C was not found with the goods at the time of checking but was produced before the assessing officer along with the reply to the show-cause notice.

Analysis: The omission to carry the declaration form with the goods at the time of checking constituted a breach of the transit requirement, and the Tax Board's reliance on the ground that penalty could not be imposed on the owner of the goods was erroneous. However, the material fact remained that the declaration form ST 18C had been furnished before the assessing officer in response to the show-cause notice. In such circumstances, the requirement of fairness and natural justice justified giving the assessee an to produce the document, and the earlier appellate authority was right in treating the later production of the form as sufficient to defeat the penalty.

Conclusion: The penalty under section 78(5) could not be sustained, and the order setting it aside was .

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