Check-post power to test declared value of transported goods extends to market-based scrutiny for suspected tax evasion.

Section 29-A of the Madhya Pradesh General Sales Tax Act, 1958 empowers check-post authorities to verify whether transport documents for notified goods state the correct value, including by reference to market value. If the declared value or other particulars are false or incorrect, the officer may record reasons, supply them to the transporter, and proceed on the basis of presumed attempted evasion of tax. The power is not limited to mechanical scrutiny of the documents as presented; it extends to testing their correctness. On that basis, the High Court was held to have erred, and the notice was restored.

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Issues: Whether the check-post officer under section 29-A of the Madhya Pradesh General Sales Tax Act, 1958 could question the value of goods shown in the transport documents by reference to market value and, if the declaration was false or incorrect as to value, initiate proceedings for presumed evasion of tax and penalty.

Analysis: Section 29-A requires transporters of notified goods to carry prescribed documents and submit the vehicle for verification, search and inspection at check-posts and barriers established to prevent or check evasion of tax. If the declaration or other documents relating to the goods are found to be false or incorrect, including in respect of the value of the goods, the officer may presume an attempt to evade tax, record reasons in writing, supply a copy to the transporter, and proceed to issue notice if still unsatisfied after considering the explanation. The statutory language expressly extends to incorrect statements as to value, and the power is not confined to the particulars mechanically stated in the documents without reference to their correctness.

Conclusion: The authorities were competent to examine whether the declared value was false or incorrect with reference to market value, and the High Court erred in holding otherwise. The challenge to the notice could not succeed.

Final Conclusion: The appeals were allowed and the impugned orders were set aside, thereby restoring the notice and the statutory power of the check-post authorities to test the correctness of the declared value for the purpose of detecting tax evasion.

Ratio Decidendi: Under section 29-A, the check-post authority may ? question the correctness of the declared value of transported goods and treat a false or incorrect declaration as a basis for presuming attempted evasion of tax.

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