Transit document compliance defeats penalty where no mens rea is shown and a missing check-post seal is not mandatory.

Penalty under the Rajasthan Sales Tax Act was held unsustainable where the statutory transit documents were produced at the time of checking and tax had already been paid. The Court treated the absence of a check-post seal as a non-mandatory defect that, by itself, did not prove tax evasion. It also accepted the concurrent finding that no mens rea was shown and no intention to evade tax could be inferred. In these circumstances, the appellate orders setting aside the penalty were found to suffer from no illegality, and the revision was liable to be dismissed.

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Issues: Whether penalty under Section 78(10-A) of the Rajasthan Sales Tax Act, 1994 was sustainable when the required documents were produced at the time of checking and the only objection was the absence of the check-post seal on the documents.

Analysis: The required documents contemplated by Section 78(2)(b) were admittedly 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 Court also accepted the concurrent finding that there was no mens rea and no basis to infer an intention to evade tax. In these circumstances, no illegality was found in the appellate orders setting aside the penalty.

Conclusion: The penalty was not sustainable and the revision was liable to be dismissed.

Ratio Decidendi: Where the statutory documents required for transit are produced and tax has been paid, a merely missing check-post seal does not by itself establish tax evasion or justify penalty, especially in the absence of mens rea.

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