Seizure of goods without independent evidence of tax evasion was held unsustainable despite transport documents.

Seizure of goods and demand for security were held unjustified where the consignment was supported by bill, invoice and form 31, and the dealer was registered. A mere letter suggesting that delivery may have been diverted to another place did not amount to independent material showing an intention to evade tax. Security could not be demanded on presumption alone, and a decision resting on conjectures and surmises was treated as unsustainable. The goods were to be released without security.

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Issues: Whether seizure of goods and demand of security were justified when the consignment was accompanied by proper transport documents and the inference of tax evasion was drawn only from a letter suggesting diversion of delivery.

Analysis: The goods were accompanied by bill, invoice and form 31, and the revisionist was a registered dealer. The seizure was sustained below on the premise that delivery was intended for another place than that shown in the documents, but no independent material established an intention to evade tax. A demand for security based on mere presumption and without recorded basis was held unsustainable, and the findings below were treated as resting on conjectures and surmises.

Conclusion: The seizure and the direction to furnish security were not justified, and the goods were ordered to be released without security in favour of the assessee.

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