Detention of goods in transit requires genuine suspicion of tax evasion; mere non-registration of consignee is insufficient.

Section 29A of the Kerala General Sales Tax Act permits detention of goods only where the officer has reason to suspect improper or non-genuine documents or an attempt to evade tax. A consignee's mere lack of registration, by itself, is insufficient to justify detention, and where goods were consigned to named purchasers with no allegation of evasion by them, the power could not be used against the consignments in transit. If the department believed the company or its branch had made taxable local sales, it had to proceed against the proper person. The detention orders and release directions were quashed as unauthorised.

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Issues: Whether goods consigned by air could be detained and release withheld under section 29A of the Kerala General Sales Tax Act, 1963 on the ground that the consignee was not a registered dealer and tax evasion was suspected.

Analysis: Section 29A permits detention only when the officer has reason to suspect that the goods are not covered by proper and genuine documents or that the person transporting them is attempting to evade tax. The mere fact that the consignee is not a registered dealer is not, by itself, enough to create such a suspicion. Where the goods were consigned to named purchasers and there was no allegation that they themselves were evading tax, the power could not be invoked against them. If the department considered that the company or its branch office had effected local sales liable to tax, proceedings had to be taken against the proper person; detention of the consignments already in transit was not a permissible substitute. The restriction also had to be read strictly in light of article 301 of the Constitution of India.

Conclusion: The detention orders and the direction requiring release orders were unauthorised and were quashed. The consignments could not be withheld on the basis of those orders.

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