Transit detention for under-valuation is valid when cogent material reasonably indicates an attempt to evade tax.

Section 19-B(1) governs assessment, allowing the assessing authority to determine value by reference to market price where lower pricing suggests tax evasion, while section 29-A(2) governs transit detention on reasonable suspicion of evasion. The check-post authority need not conclusively determine the true value of goods before acting; it may detain goods in transit if under-valuation is supported by cogent material and gives rise to a reasonable inference of attempted tax evasion. Mere assertion is insufficient, and the power must rest on material capable of creating the requisite suspicion.

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Issues: Whether the check-post authority can detain goods in transit under section 29-A(2) of the Kerala General Sales Tax Act, 1963 on the basis of under-valuation as indicating an attempt to evade tax, notwithstanding that valuation under section 19-B(1) is part of the assessment process.

Analysis: Section 19-B(1) operates at the stage of assessment and empowers the assessing authority to determine value on the basis of prevailing market price where there is a view to evade tax by showing lower prices in the accounts. Section 29-A(2), on the other hand, operates while the goods are in transit and authorises detention where the check-post authority has reason to suspect an attempt to evade tax. The two provisions operate in different fields. The check-post authority is not required to conclusively determine the true value of the goods, but may detain them where under-valuation, supported by cogent material, gives rise to a reasonable inference of tax evasion. The power cannot rest on mere ipse dixit and must be founded on material sufficient to form the requisite suspicion.

Conclusion: Detention of goods in transit on the basis of under-valuation, where it reasonably indicates an attempt to evade tax, is valid under section 29-A(2), and section 19-B(1) does not exclude that power.

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