Transit document penalty is not automatic when the declaration is later produced and no intent to evade tax appears.

Penalty under section 78(5) of the Rajasthan Sales Tax Act was not sustainable where the declaration form ST-18C was initially missing at interception but was produced at the first opportunity in reply to notice, the goods were otherwise tax-paid, and the surrounding record showed no intent to evade tax. Transit document default was treated as non-automatic and dependent on the presence of mens rea. The Supreme Court ruling in D.P. Metals was applied as binding precedent, and the penalty order was set aside on those facts.

---

---

Issues: Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 was leviable for initial non-availability of declaration form ST-18C when the assessee produced the form in reply to the show-cause notice and the record otherwise showed tax-paid goods and no intent to evade tax.

Analysis: Penalty under section 78(5) could not be imposed mechanically merely because the declaration form was not found with the goods at the time of interception. The material on record showed that the goods were duly tax-paid, the remaining documents were available, and the assessee furnished form ST-18C at the first opportunity after notice. In such circumstances, absence of mens rea to evade tax was established, and the ruling of the Supreme Court in D.P. Metals governed the controversy as binding law under Article 141 of the Constitution of India.

Conclusion: The penalty was not leviable on the facts of the case and the order setting aside the penalty was .

Final Conclusion: The revision failed because the facts did not justify penalty under the transit provisions, and the binding Supreme Court precedent compelled the same result.

Ratio Decidendi: Penalty for transit document default is not automatic; where the assessee subsequently produces the required declaration and the record shows no intent to evade tax, penalty cannot be sustained.

---