Transit pass presumption and seizure limits under trade tax law turn on expiry and disclosed document particulars.

Presumption of intra-State sale under the U.P. Trade Tax Act arises only after the transit pass is not surrendered within the stipulated period; until that time, no statutory presumption can be invoked. The commentary also states that exit-stage verification must remain confined to the particulars disclosed in the transit documents, so a mismatch in the number of pieces inside otherwise matching packages does not, by itself, justify seizure where the package count and description of goods correspond with the transit pass. The stated effect is that seizure based only on such internal variation rests on suspicion rather than proven non-coverage by the transit documents.

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Issues: (i) Whether the presumption of sale within the State under section 28-B of the U.P. Trade Tax Act, 1948 could be drawn before expiry of the time allowed for surrender of the transit pass. (ii) Whether seizure could be sustained on the basis of variation in the number of pieces inside packages when the number of packages and description of goods matched the transit documents.

Issue (i): Whether the presumption of sale within the State under section 28-B of the U.P. Trade Tax Act, 1948 could be drawn before expiry of the time allowed for surrender of the transit pass.

Analysis: Section 28-B is a machinery provision intended to prevent tax evasion and creates only a rebuttable presumption when the transit pass is not delivered at the exit check-post within the prescribed time. Until the period for surrender expires, the statutory presumption does not arise. Mere presence of the vehicle at a place inside the State before expiry of the transit period is irrelevant for invoking the presumption.

Conclusion: The presumption under section 28-B could not be invoked before the transit pass period expired.

Issue (ii): Whether seizure could be sustained on the basis of variation in the number of pieces inside packages when the number of packages and description of goods matched the transit documents.

Analysis: The verification at the exit stage had to be confined to the particulars mentioned in the transit pass and the accompanying documents. Where the documents mentioned only the number of packages and the description of goods, the authorities could not treat a difference in the number of pieces inside the packages as a discrepancy defeating the transit declaration, particularly when the packages and description were otherwise the same. The seizure was therefore founded on suspicion rather than on material establishing that the goods were not covered by the transit pass.

Conclusion: The seizure was not justified on the alleged variation in the number of pieces inside the packages.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the seized goods were directed to be released without security.

Ratio Decidendi: Under section 28-B, the presumption of intra-State sale arises only upon failure to surrender the transit pass within the stipulated time, and transit verification cannot extend beyond the particulars actually disclosed in the transit documents.

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