Transit-pass security at check-post upheld as a reasonable anti-evasion safeguard for goods passing through the State.

The transit-pass requirement for goods merely passing through Assam was upheld as a valid fiscal control measure under the Assam General Sales Tax Act, 1993. Security collected at the entry check-post was treated as an ancillary safeguard to ensure surrender of the duly counter-signed transit pass at the exit check-post and to prevent clandestine sale or tax evasion. Because the security was refundable on compliance, the levy was held to be reasonable and not arbitrary, capricious or whimsical. The challenge to the check-post demand therefore failed and the writ petition was dismissed.

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Issues: Whether the demand and collection of security at the entry check-post under the Assam sales tax transit-pass scheme for goods passing through the State was arbitrary or illegal when the goods were accompanied by valid documents and the security was refundable on production of a duly counter-signed transit pass.

Analysis: Section 46(15) of the Assam General Sales Tax Act, 1993 and the relevant check-post rules require a transit pass for goods merely passing through the State and create a presumption of sale within the State if the prescribed pass is not surrendered at the exit check-post. The security was held to be an ancillary mechanism to make that statutory control effective and to prevent clandestine sale and tax evasion. The Court relied on the broad latitude available in fiscal measures and held that the levy of security, being refundable on compliance, was a reasonable precautionary measure and not arbitrary, capricious or whimsical.

Conclusion: The demand for security deposit at the check-post was upheld and the challenge failed. The writ application was dismissed.

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