JUDGMENT Mrs. B. V. Nagarathna J. - This appeal is filed by the dealer challenging the order dated July 7, 2008 by the Additional Commissioner of Commercial Taxes. The relevant facts of the case are that the goods vehicle bearing No. KA-07/3614 was intercepted on September 17, 2005 by the Commercial Tax Officer (CTO), Hosur Road Sales Tax Check-post (outward), Attibele, Bangalore, while it was transporting industrial cables of two different varieties under two separate sale bills aggregating to Rs. 1,48,359. The consignments were being carried in the course of inter-State trade in favour of M/s. Eqsun Reyalla Ltd., Plot No. 98, Sipcot Industrial Complex, Hosur and the same were carried by the appellant/consignor. Since the goods vehicle did not stop at the check-post and the documents were not offered for verification before the CTO, the vehicle was chased for a distance of 1.5 km., beyond the check-post and stopped for non-production of documents. The CTO did not verify regarding the validity of the bills of sale. But according to the CTO there was contravention of section 53(2)(c) of the KVAT Act, 2003 on account of the failure to stop the goods vehicle and to produce the documents, and then to proceed after verification of the same. Accordingly, penalty proceedings were initiated and penalty equal to the amount of tax leviable in terms of section 53(12)(a)(i) of the said Act was levied. According to the appellant - consignor, failure to stop the vehicle at the check-post was not intentional and that the documents, viz., bills of sale are valid and in accordance with law and merely because of the failure to stop the vehicle by the driver would not be a reason to levy penalty as if it is a case of intention to evade tax. Against the said order of penalty levied under section 53(12) dated September 29, 2005, an appeal was preferred before the Joint Commissioner of Commercial Taxes and the said appellate authority after hearing both sides noted that on September 17, 2005 the goods vehicle was intercepted and found that the goods in transit were accompanied by the prescribed documents containing requisite information. The only grievance of the authority was that the driver did not stop the vehicle at the check-post and that only after a chase the vehicle was stopped which led to a suspicion that there was an intention to evade tax. The only grievance of the authority was that the driver did not stop the vehicle at the check-post and that only after a chase the vehicle was stopped which led to a suspicion that there was an intention to evade tax. Since there was no mahazar drawn in the presence of two independent witnesses to show that the lorry did not stop at the check-post and it was chased for about 1.5 kms. and brought back to the check-post for verification and neither was there any policy complaint in this regard, the appellate authority held that there was no intention on the part of the appellant to attempt to evade tax since the goods were accompanied with the valid invoices which cannot be said to be non-compliance with the requirement of law and accordingly, allowed the appeal. Thereafter the Additional Commissioner of Commercial Taxes issued show-cause notice under section 64(1) of the Act on the ground that failure to stop the vehicle at the check-post of the CTO was in violation of section 53(2)(c) of the Act and that the obligation on the part of the driver to carry the documents was under section 53(2)(b) of the said Act and merely because the driver of the vehicle in question was carrying the bills of sale would not amount to compliance of section 53(2)(c) of the Act and since the penalty records reveal that the driver had not stopped the vehicle at the check-post, there was contravention of section 53(2)(c) of the Act and penalty under section 53(12) was justified and therefore, the appellate order was prejudicial to the interest of the Revenue. Therefore, the same required to be revised. In reply to the said show-cause notice, the appellant submitted that the vehicle not being stopped by the driver was not intentional, but was technical and therefore, to drop the proceedings. After hearing the appellant herein, the revisional authority set aside the order of the appellate authority dated July 3, 2006 by holding that the penalty under section 53(12) of the Act was justified and therefore, restored the same. It is the said order which is under challenge in this appeal. We have heard the learned counsel for the appellant and the learned Additional Government Advocate for the State. It is the said order which is under challenge in this appeal. We have heard the learned counsel for the appellant and the learned Additional Government Advocate for the State. According to the counsel for the appellant, the vehicle could not be stopped at the check-post because of the long queue of the vehicles that there was no intention to evade payment of tax and the driver of the vehicle in question had the requisite documents regarding the consignment and therefore, the imposition of penalty for non-stopping of the vehicle is unjustified. Alternatively, he submitted that the penalty which could have been imposed is equivalent to the tax payable and since the consignment in the instant case is industrial cables only four per cent of their value could have been the tax that was payable and therefore, the penalty also could not have been over and above four per cent. He has also submitted that the appellant has recently commenced its operation and therefore, a lenient view be taken in the matter in the absence of any intention to evade payment of tax. Counsel for the appellant has also relied upon certain decisions which will be adverted to later on. Per contra, it is submitted by the learned Additional Government Advocate that in the instant case there has been a violation of section 53(2)(c) of the Act in view of the fact that the vehicle did not stop at the check-post. That the goods carried in the vehicle were insulated cables and not industrial cables for which the rate of tax is 12.5 per cent and accordingly, the penalty was levied and the order of the revisional authority does not call for any interference in this appeal. Section 53 of the Act deals with establishment of check-post and inspection of goods in movement. Under section 53(2)(c), the owner or person in-charge of the goods vehicle has to report at the first check-post barrier situated on the route ordinarily taken from the place in the State, from which the movement of the goods commences to its destination and produce the documents before any officer-in-charge of check-post or barrier and obtain the seal of such officer. The documents which are referred to are the goods vehicle record, a trip sheet or a log book and the documents such as tax invoice, bill of sale or delivery note and that the bill of sale and delivery note have to be given to the concerned authority at the check-post and carry the copies of the same unit termination of movement of goods. In the event of there being violation or prevention of provisions of section 53(2), section 53(12)(a) states that in the absence of any sufficient cause being furnished a penalty not less than the amount of tax leviable, but not exceeding one and half of the amount of tax leviable in respect of the goods under transport in contravention of section 53(2)(c) can be levied if the dealer registered under the Act accepts that he is the consignor or consignee of the goods. In order to ascertain the amount of tax leviable, section 4(1)(a) of the Act has to be considered and according to the counsel for the appellant, in the instant case section 4(1)(a)(2) of the Act read with Third Schedule is applicable in respect of the goods in question and accordingly, tax at the rate of four per cent is leviable and not tax at the rate of 12.5 per cent in terms of section 4(1)(b) of the Act. In the instant case, the revisional authority has noted that it is an admitted fact that the driver of the goods vehicle did not stop at the check-post. It was chased and stopped about one and half kilometres away from the check-post. It is also admitted that the same was a mistake though unintentional, but the consignment was supported by valid sale bill. In view of this admission, the violation under section 53(2)(c) of the Act is established and therefore, the penalty under section 53(12) is attracted. If sufficient cause is not made out, the levy of penalty under section 53(12) is attracted. From a reading of section 53(2) of the Act, it is clear that there is a mandatory duty on the part of the driver of the vehicle to stop the vehicle at the check-post and also to submit a copy of the bill of sale pertaining to the sale in the industrial trade and to carry another copy of the bill until termination of movement of the goods. In this context, it is of relevance to refer to section 159 of the KVAT Rules which also mandates that the driver or any person in charge of the goods vehicle shall stop the vehicle at the check-post or a barrier and keep it stationary for as long as it required by the officer-in-charge of the check-post or barrier and allow examination of the goods in the vehicle and inspection of all the records connected with the goods in the vehicle and after examination of the goods by the officer, the owner or other person in charge of the goods vehicle has to deliver to such officer copies of the goods vehicle record, trip sheet or log book and also the tax invoice, bill of sale or delivery note, which accompanies the goods vehicle. However, in the instant case, the failure to stop the vehicle at the check-post for the purpose of production of the documents in the context of rule 159 is established where the said failure on account of an intention not to stop the vehicle to evade tax or even without any such intention to defraud Revenue. The mere fact that the vehicle did not stop at the check-post which has been established in the instant case is sufficient to hold that there is violation of section 53(2)(c) of the Act. Therefore, the appellant cannot escape from the levy of penalty in terms of section 53(12) read with rule 159(4). Therefore, the explanation given by the appellant that on account of there being a long queue of vehicles, the goods vehicle in question could not be stopped or that there was mistake on the part of the driver in not stopping the vehicle cannot be accepted. On the other hand, the fact that in the instant case, the vehicle had to be chased for a distance of 1.5 kms. from the check-post and then intercepted clearly establishes the violation of section 53(2)(c) of the Act. Therefore, the penalty clauses were lightly invoked. On the other hand, the fact that in the instant case, the vehicle had to be chased for a distance of 1.5 kms. from the check-post and then intercepted clearly establishes the violation of section 53(2)(c) of the Act. Therefore, the penalty clauses were lightly invoked. Counsel for the appellant, however, has relied upon certain decisions with regard to the imposition of penalty in the case of Hindustan Steel Ltd. v. State of Orissa reported in [1970] 25 STC 211 (SC); AIR 1970 SC 253 , wherein it is held that whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances; even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. The apex court was dealing with Orissa Sales Tax Act and in the said case on an honest and genuine belief that the company was not a dealer, the said company was not registered. Under such circumstances, the above observations were made. The said decision has been followed by this court in the case of Ws Tele Systems Ltd. v. Additional Commissioner of Commercial Taxes in Karnataka, Zone - II, Bangalore [1997] 107 STC 568 (disposed of on June 16, 1997 as S.T.A. No. 20 of 1997) wherein it was held that there was a technical violation of law and therefore, the imposition of penalty could not be sustained, as the guilty intention on the part of the assessee or taxpayers in not complying with the statutory requirements was not present. However, in the instant case, the check-post officer, had to chase the vehicle and stop the same for inspecting the consignment and there has been violation of the provisions of section 53(2)(c) of the Act. Hence the aforesaid decisions are not applicable to the facts of the instant case. However, in the instant case, the check-post officer, had to chase the vehicle and stop the same for inspecting the consignment and there has been violation of the provisions of section 53(2)(c) of the Act. Hence the aforesaid decisions are not applicable to the facts of the instant case. In the case of Nath Steel & Non-Ferrous Re-Rolling Mills v. Additional Commissioner of Commercial Taxes reported in [1997] 104 STC 118 (Karn) where the appellate authority had satisfied itself that there was no intention to avoid the said provision as it is a statutory duty cast on the dealer. Therefore, reliance placed by the counsel for the appellant on the said decision to take a lenient view in the matter cannot be accepted as the vehicle had to be chased for 1 1/2 kms. before it could be stopped. In the instant case, however, taking the total value of the insulated cables to be at Rs. 1,48,359 as declared, the penalty equal to one and half times of the local rate of tax (12.5 per cent x 1.5) Rs. 27,817 has been levied. However, the proposed penalty was reduced to Rs. 18,545 under section 53(12)(a)(i). Counsel for the appellant submits that in the instant case, the rate of taxation is only four per cent, which would amount to Rs. 5,05,372 and therefore, the penalty ought to have been only to that extent and that erroneously the rate of taxation imposed in the instant case is 12.5 per cent. In the instant case, the goods are described in the tax invoice as PVC insulated cables and as per entry No. 30 of the Third Schedule to the Act, the rate of taxation is only four per cent. He also submits that the Central sales tax paid in fact is only four per cent and therefore, the rate of penalty could not have been 12.5 per cent. However, the authorities have considered the goods in question to be insulated cables and accordingly, the rate of taxation would be 12.5 per cent for imposed penalty at the rate of 12.5 per cent of the value of the goods. However, the authorities have considered the goods in question to be insulated cables and accordingly, the rate of taxation would be 12.5 per cent for imposed penalty at the rate of 12.5 per cent of the value of the goods. But considering the fact that in the instant case, the goods in question PVC pipes and as per the tax invoice four per cent has been shown to be the rate of taxation, we are of the view that the authorities concerned could not have levied 12.5 per cent of the value of the goods by way of penalty. For the aforesaid reasons, the appeal is allowed in part. The order of the revisional authority with regard to levy of penalty is confirmed. However, the rate of penalty shall be at four per cent of the value of the goods and not 12.5 per cent as determined by the authorities which levied the penalty.