Transit documents and consignee instructions defeated alleged transport violation; penalty under the Karnataka Sales Tax Rules was unsustainable.

Goods in transit supported by delivery notes and invoices, with the consignee and delivery places recorded, did not establish a violation of the Karnataka Sales Tax transport requirements merely because unloading occurred at a different place from the one originally mentioned. The record showed tax had been collected on the bills and disclosed no material indicating an attempt to evade tax. The revisional power could be used only where the appellate order was erroneous and prejudicial to revenue, and that foundation was absent. The penalty under section 28A(2)(b) and section 28A(2)(d) was therefore unsustainable, and the appellate order stood restored.

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Issues: Whether the appellant violated section 28A(2)(b) and section 28A(2)(d) of the Karnataka Sales Tax Act, 1957 read with Rule 23B of the Karnataka Sales Tax Rules, and whether the revisional authority was justified in setting aside the appellate order and restoring the penalty.

Analysis: The goods in transit were covered by delivery notes and invoices, and the documents recorded the consignee and the places of delivery. Tax had been collected on the bills, and there was no material to show any attempt to evade tax. The only objection was that unloading took place at Seshadripuram instead of Mosque Road, but the record showed that the goods were being delivered in accordance with the consignee's instructions and that the change of unloading place did not, by itself, establish a contravention of the statutory transport requirements. The revisional power under section 22A(1) could be exercised only where the appellate order was erroneous and prejudicial to the interests of revenue, and no such foundation was made out.

Conclusion: The appellant did not violate section 28A(2)(b) or section 28A(2)(d) of the Karnataka Sales Tax Act, 1957, and the penalty was not sustainable. The revisional order was rightly interfered with and the appellate order was restored.

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