Transit document defects under VAT law support penalty where records do not match the movement of goods.

Penalty under Section 47(6) of the Kerala Value Added Tax Act was attracted where goods were detained in transit and the supporting records did not match the claimed movement of the consignment. The absence of a proper tax invoice and transit pass, together with inconsistencies between the declared movement and the actual route, showed that the defect was not merely technical. The note states that compliance required a transit pass from the entry check post to the exit check post when goods were moved through the State, and that the Tribunal's reliance on the goods being non-saleable or fast-moving was irrelevant in a suspected tax evasion case.

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Issues: Whether penalty was leviable under Section 47(6) of the Kerala Value Added Tax Act, 2003 for transport of goods without proper supporting documents, and whether the defect in the records was merely technical.

Analysis: The goods were detained during transit and the records did not support the claimed movement of the consignment. The declared movement, the actual route taken, and the absence of a proper tax invoice and transit pass showed that the defect was not merely technical. The Tribunal's view that the goods were not saleable or fast-moving was held to be irrelevant in a case involving suspected tax evasion. Proper compliance required a transit pass from the entry check post to the exit check post when the goods were moved through the State.

Conclusion: Penalty under Section 47(6) was held to be attracted and the Tribunal's finding was set aside, in favour of the Revenue.

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