Technical breach of check-post form requirement cannot sustain penalty absent mens rea or intent to evade tax.

Penalty for failure to carry Form 31 at a U. P. sales tax check post was held unsustainable where the goods were duly reflected in excise records and no intention to evade tax or cause loss to revenue was found. The court treated the breach as merely technical and ruled that, without mens rea or revenue loss, the form requirement alone could not justify penalty under the Act. The penalty order was therefore set aside and the assessee succeeded.

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Issues: Whether penalty under Section 15-A(1)(o) of the U. P. Sales Tax Act was sustainable for importing goods without Form 31 when the goods were otherwise entered in excise records and no intention to evade tax was found.

Analysis: The revision concerned levy of penalty for breach of the requirement to carry and produce Form 31 at the check post under Section 28-A of the U. P. Sales Tax Act. The finding recorded in the case was that the goods were duly entered in the excise records and that there was no element of mens rea or intention to cause loss to revenue. On that factual basis, the mere technical breach of the check-post requirement was held insufficient to justify the penalty.

Conclusion: Penalty was not justified and the assessee succeeded.

Final Conclusion: The penalty order was set aside and the revision was allowed in favour of the assessee.

Ratio Decidendi: Where the authority finds absence of intention to evade tax and no loss to revenue is intended, a mere breach of the check-post form requirement does not, by itself, sustain penalty under the Act.

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