Stock transfer penalty under sales tax law cannot be sustained for a pre-notification movement with a blank declaration form.

Penalty under section 78(5) of the Rajasthan Sales Tax Act was held unsustainable for a 1996 stock transfer where the goods were intercepted before the 20.03.2000 notification and the record showed movement by way of stock transfer. The Court applied earlier decisions and treated the blank or absent ST-18A declaration as insufficient, by itself, to attract penalty in a pre-notification stock transfer case. The Tax Board's order deleting the penalty was upheld.

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Issues: Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be sustained for stock transfer of goods in 1996 where the declaration form ST-18A was blank and the transaction preceded the notification dated 20.03.2000.

Analysis: The goods were intercepted on 15.10.1996 and the material on record showed that the movement was by way of stock transfer. The Court noted that the relevant incident occurred prior to the Government notification dated 20.03.2000 and that, on the admitted facts, the case was covered by earlier decisions holding that penalty could not be imposed in such pre-notification stock transfer situations merely because the declaration form was blank or not carried.

Conclusion: The penalty under section 78(5) was not liable to be sustained, and the Tax Board's order deleting the penalty was upheld.

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