Statutory penalty for transport-rule breach stands without mens rea, but intent matters when quantifying the penalty.

Penalty under section 15A(1)(o) of the U.P. Trade Tax Act was attracted by non-compliance with section 28A's import and transport requirements, and proof of an intention to evade tax was not a condition precedent to levy it. The seizure power under section 28A(6) was treated as a separate provision that depends on satisfaction of evasive intent and does not govern imposition of penalty for statutory breach. Mens rea was nevertheless relevant when fixing the amount of penalty, so the Tribunal's approach treating it as irrelevant for quantification was unsustainable. The penalty liability was upheld, but the amount was remitted for fresh determination with due regard to intention to evade tax.

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Issues: (i) Whether penalty under section 15A(1)(o) of the U. P. Trade Tax Act, 1948 could be levied for violation of section 28A even in the absence of intention to evade tax. (ii) Whether mens rea was a relevant factor for quantification of penalty.

Issue (i): Whether penalty under section 15A(1)(o) of the U. P. Trade Tax Act, 1948 could be levied for violation of section 28A even in the absence of intention to evade tax.

Analysis: Section 15A(1)(o) was held to operate on violation of the import and transport requirements contained in section 28A(2) and section 28A(5). The power of seizure under section 28A(6) was treated as a separate field, available only where the officer is satisfied that the goods were being transported with an intention to evade tax. That requirement was held not to control the distinct power to impose penalty for statutory non-compliance. Accordingly, absence of mens rea was not treated as a condition precedent to levy of penalty under section 15A(1)(o).

Conclusion: Penalty could be imposed under section 15A(1)(o) for breach of section 28A even without proof of intention to evade tax.

Issue (ii): Whether mens rea was a relevant factor for quantification of penalty.

Analysis: The Court relied on the principle that while mens rea is not necessary to attract a civil penalty for statutory delinquency, it remains relevant where the authority has discretion in fixing the amount. The Tribunal had treated mens rea as irrelevant even at the stage of quantification, which was held to be legally unsustainable. The penalty amount therefore required reconsideration with due regard to the element of intention to evade tax.

Conclusion: Mens rea was relevant for determining the quantum of penalty, and the matter was remanded for fresh quantification.

Final Conclusion: The liability to penalty was upheld, but the amount of penalty was set aside for fresh determination by the Tribunal with due regard to the element of intention to evade tax.

Ratio Decidendi: Under section 15A(1)(o), penalty for violation of section 28A is attracted by statutory non-compliance itself, while mens rea bears on the discretionary quantification of penalty and not on the existence of jurisdiction to impose it.

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