Tax evasion penalty upheld where transport documents were defective and no denial of reasonable hearing was shown.

Material defects in statutory transport documents, including omission of the vehicle number, use of a different entry point and unexplained delay in transit, justified an inference of intention to evade tax, so the penalty was upheld. The Court held that such omissions could not be treated as a mere bona fide mistake where the prescribed transport records were not strictly complied with and no satisfactory cause was shown for the interception circumstances. It also found no denial of natural justice because the notice to appear was personally served five days in advance, which was sufficient to afford a reasonable opportunity of hearing. The writ challenge therefore failed and the penalty remained undisturbed.

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Issues: (i) whether the defective road permit, non-mention of the vehicle number, wrong entry point, and delay in transit justified the inference of an intention to evade tax and the consequent penalty; (ii) whether the petitioner was denied a reasonable opportunity of hearing before imposition of penalty.

Issue (i): whether the defective road permit, non-mention of the vehicle number, wrong entry point, and delay in transit justified the inference of an intention to evade tax and the consequent penalty

Analysis: The statutory transport documents were required to be carried in the prescribed form, and strict compliance was necessary to prevent evasion. The record showed that the vehicle number was missing even in the tax invoice and in the road permit, the declared entry point was different from the point at which the truck was intercepted, and the consignment was intercepted after inordinate delay without any shown unavoidable cause. On these facts, the omissions could not be treated as a mere bona fide mistake and a deliberate attempt to evade tax could not be ruled out.

Conclusion: The finding of tax evasion and the penalty were upheld against the petitioner.

Issue (ii): whether the petitioner was denied a reasonable opportunity of hearing before imposition of penalty

Analysis: The notice to appear before the Commercial Taxes Officer was personally served five days in advance. The Court found that this interval was not insufficient and there was no legal basis to hold that the petitioner was deprived of a reasonable opportunity of hearing.

Conclusion: No violation of the requirement of reasonable opportunity of hearing was made out.

Final Conclusion: The challenge to the penalty order failed, and the writ petition was dismissed, leaving the penalty undisturbed.

Ratio Decidendi: Where statutory transport documents contain material defects, the vehicle travels through an unnotified entry point after unexplained delay, and no satisfactory cause is shown, the authority may infer an intention to evade tax and impose penalty, provided a reasonable opportunity of hearing has been afforded.

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