Retrospective penalty amendment and supply of transit form defeated penalty liability under the sales tax law.

A clarificatory amendment to the penalty provision in section 78(5) of the Rajasthan Sales Tax Act, 1994 was treated as retrospective, so the fact that the transit of goods occurred before the amendment did not, by itself, exclude penalty exposure. However, the record showed that Form No. ST-18A had been supplied in response to the show-cause notice, and on that factual basis penalty could not be sustained. The earlier order sustaining penalty was therefore not supportable on the facts, and the assessee was held not liable to penalty.

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Issues: Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be sustained for transit of goods on 8 January 2001 in the light of the amendment dated 22 March 2002 and the fact that Form No. ST-18A was later supplied to the department.

Analysis: The amendment to section 78(5) was treated as clarificatory and retrospective, so the mere fact that the transit event pre-dated the amendment did not by itself exclude penalty exposure. At the same time, the record showed that Form No. ST-18A bearing No. 6718/16 had been supplied in response to the show-cause notice, and on that factual basis the assessee could not be fastened with penalty. The earlier view of the Tax Board sustaining the order of the appellate authority was therefore not sustainable on the legal reasoning adopted, but the factual foundation for penalty was absent.

Conclusion: The revision was dismissed, and the assessee was held not liable to penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994.

Ratio Decidendi: A clarificatory amendment to a penalty provision may operate retrospectively, but penalty cannot be imposed where the statutory form required in relation to transit of goods is shown to have been supplied on the record.

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