Penalty under Rajasthan Sales Tax law fails where required documents and prior tax payment negate evasion, and check-post seal is directory.

Penalty under the Rajasthan Sales Tax Act was found unsustainable where the assessee had produced the requisite documents at the time of checking and tax had already been paid, because those facts negatived any inference of evasion. The absence of a check-post seal was held not to be a mandatory requirement under the relevant provision; the requirement was treated as directory rather than obligatory. The appellate authorities' concurrent finding of no mens rea was also noted, supporting deletion of the penalty and leaving the orders setting it aside undisturbed.

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Issues: Whether penalty under section 78(10)(a) of the Rajasthan Sales Tax Act, 1994 was sustainable when the requisite documents under section 78(2)(b) were available and tax had already been paid, notwithstanding absence of the check-post seal.

Analysis: The availability and production of all required documents at the time of checking, together with prior payment of tax, negatived any inference of evasion. The absence of the check-post seal was held not to be a mandatory requirement under section 78(2)(b). The provision was treated as directory, and the concurrent findings of the appellate authorities recorded absence of mens rea on the part of the assessee.

Conclusion: The penalty was not sustainable and no interference was called for with the orders setting it aside.

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