Transit pass procedure cannot be denied and tax cannot be demanded on mere suspicion when goods are only passing through the State.

Where goods are merely in transit through Kerala, the transit pass under section 30B and rule 35B must be issued at the first check-post and produced at the exit check-post. A presumption of local sale, and consequent tax liability or detention, arises only if the transit pass is not produced, the declaration is false or bogus, or the movement outside the State is not satisfactorily proved. On the stated facts, none of those statutory triggers existed, so refusal to issue the transit pass and demand tax merely on suspicion were unlawful.

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Issues: Whether a vehicle carrying goods in transit through the State was entitled to a transit pass at the first check-post under section 30B of the Kerala General Sales Tax Act, 1963 and rule 35B of the Kerala General Sales Tax Rules, 1963, and whether tax could be levied or goods detained merely on suspicion without the statutory basis for presumption of sale within the State.

Analysis: Section 30B requires the person in charge of a vehicle passing through the State to obtain a transit pass in the prescribed form from the first check-post and deliver it at the last check-post before exit. The provision operates with a statutory presumption of local sale only where the transit pass is not produced at the exit check-post, or where the statutory declaration is false or bogus, or where the movement outside the State is not satisfactorily proved. Rule 35B prescribes the form of the transit pass. On the facts, none of the conditions attracting the presumption had arisen, and the detention and demand were based only on suspicion regarding possible sale within the State.

Conclusion: The person in charge of the vehicle was entitled to the transit pass, and the refusal to issue it while imposing tax liability merely on suspicion was unwarranted and illegal.

Final Conclusion: The petitions succeeded to the extent that the authorities were directed to comply with the transit pass procedure under the Act and Rules, while the request for refund was left to be considered in accordance with law.

Ratio Decidendi: Where goods are merely in transit through the State, tax liability can arise only in the statutory situations creating a presumption of local sale, and a transit pass cannot be refused or tax demanded merely on suspicion.

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