Discretionary transit penalty cannot stand where documents are in order and there is no intent to evade tax.

Penalty for breach of transit provisions was not warranted where the vehicle carried the requisite invoices and documents, and the only lapse was movement through an irregular route without check-post verification. Section 78(10A) of the Rajasthan Sales Tax Act, 1994 uses the word "may", making penalty discretionary, and it is justified only when the breach has a nexus with tax evasion or avoidance. On the facts found, there was no material showing an intention to evade tax, so the violation was treated as a technical lapse and the penalty could not be sustained.

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Issues: Whether penalty for violation of the transit provisions was sustainable when the driver carried the requisite documents and there was no finding of intention to evade tax.

Analysis: The vehicle was intercepted while carrying the goods, and the documents and invoices accompanying the consignment were found to be in order. The breach relied upon was only that the vehicle moved through an irregular route without getting the goods checked at the check-post. Under section 78(10A) of the Rajasthan Sales Tax Act, 1994, the use of the word "may" makes imposition of penalty discretionary, and penalty is justified only where the breach has a nexus with tax evasion or avoidance. On the facts found by the lower authorities, there was no material showing an intention to evade tax, and the lapse was treated as technical.

Conclusion: The penalty was not warranted, and the revision seeking restoration of the penalty failed.

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