Mandatory check-post endorsements justify penalty despite no tax liability where goods enter Karnataka without required compliance.

Non-compliance with mandatory check-post endorsement requirements under the sales tax regime justified penalty where goods were moved from Tamil Nadu into Karnataka without the required endorsements at the en-route or Karnataka check-post. The claim that the movement was only a consignment transfer and that the omission was bona fide was rejected because the documentary requirements were not met. The absence of tax liability did not excuse breach of the statutory procedure, so the penalty was sustained and the restoration of the penalty order was upheld.

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Issues: Whether penalty was leviable for failure to obtain the required check-post endorsements while transporting goods into Karnataka, notwithstanding the claim that the movement was only a consignment transfer and that no tax was payable.

Analysis: The goods were transported from Tamil Nadu into Karnataka without obtaining the required endorsement at any en-route check-post in Tamil Nadu or at the Karnataka check-post. The explanation that the omission was bona fide and that the transaction was a consignment transfer was rejected because the record showed clear non-compliance with the mandatory documentary requirements. The absence of tax liability did not by itself justify setting aside the penalty when the statutory check-post procedure had not been followed.

Conclusion: The penalty was rightly imposed and the order restoring the penalty was sustained.

Final Conclusion: The appeal failed, and the revenue's position on enforcement of the mandatory check-post requirements was upheld.

Ratio Decidendi: Non-compliance with mandatory check-post endorsement requirements under the sales tax regime justifies penalty, and the mere absence of tax liability does not excuse breach of such statutory procedure.

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