Penalty for missing road permit is limited by statute when goods are not taxable in the State.

Penalty for non-production of the prescribed road permit under section 72(6) of the Jharkhand Value Added Tax Act could not be enhanced to three times the tax leviable where no tax was payable in Jharkhand. The statutory scheme was read to preserve the alternative fixed penalty expressly provided, and the authorities were required to examine whether the goods were taxable in the State before imposing the higher amount. The larger penalty was therefore unsustainable, and the demand and appellate orders were set aside to the extent they exceeded the statutory minimum.

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Issues: Whether, on a proper construction of section 72(6) of the Jharkhand Value Added Tax Act, 2005, the penalty for non-production of the prescribed road permit could exceed Rs. 5,000 when the goods were not taxable in Jharkhand.

Analysis: Section 72(6) authorises penalty for violation of clause (a) of section 72(3) and links the quantum to three times the tax leviable on the goods or Rs. 5,000, whichever is greater. The provision was read in the context of the movement of goods where the documents were otherwise available and the authorities had proceeded only on non-production of the road permit. The Court held that the statutory scheme does not permit imposition of a penalty of three times the tax leviable when no tax is payable in Jharkhand, because such an approach would ignore the alternative amount expressly provided in the statute. The authorities also failed to examine whether the goods were taxable within Jharkhand before fastening the higher penalty.

Conclusion: The higher penalty could not be sustained. The penalty was confined to Rs. 5,000, and the demand and appellate orders imposing the larger amount were set aside to that extent.

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