Transit document compliance defeats penalty when tax is paid and absence of a check-post seal does not prove evasion.

Penalty under the Rajasthan Sales Tax Act was held unsustainable where the transit documents required under Section 78(2)(b) were produced at the time of checking and tax had already been paid. The absence of a check-post seal was treated as a directory, not mandatory, requirement, so it could not by itself establish evasion. With all requisite documents available and no mens rea proved, intention to evade tax could not be inferred. The concurrent appellate finding of absence of mens rea disclosed no illegality, and the penalty order was not interfered with.

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Issues: Whether penalty under Section 78(10A) of the Rajasthan Sales Tax Act, 1994 could be sustained when the requisite documents were produced at the time of checking but the check-post seal was absent.

Analysis: The required documents under Section 78(2)(b) of the Rajasthan Sales Tax Act, 1994 were available and produced at the time of checking, and the tax had already been paid. The absence of a check-post seal was held not to be a mandatory requirement. The provision was treated as directory, and in the presence of all requisite documents, intention to evade tax could not be inferred. The concurrent finding of absence of mens rea recorded by the appellate authorities was found to disclose no illegality.

Conclusion: Penalty was not justified, and no interference was called for with the concurrent orders setting aside the penalty.

Ratio Decidendi: Where the statutory documents required for transit are produced and tax has been paid, a mere absence of check-post seal does not by itself establish evasion or justify penalty if the provision is directory and mens rea is not proved.

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