Transit pass penalty upheld where claimed railway dispatch failed to rebut the presumption of intra-State diversion.

Penalty for non-surrender of transit passes under section 28B of the U.P. Trade Tax Act, 1948 was sustained because the dealer failed to rebut the statutory presumption of intra-State diversion. The claimed onward dispatch of goods by railway from Kanpur did not establish that the goods were the same as those covered by the transit passes, and no prior intimation was given to the trade tax authorities. The supporting material was found insufficient and the alleged transactions were not satisfactorily verified, so the failure to surrender the passes remained unexplained and the revisions failed.

---

---

Issues: Whether penalty for non-surrender of transit passes under section 28B of the U.P. Trade Tax Act, 1948 was sustainable when the goods were claimed to have been sent onward by railway from within the State and the statutory presumption was said to be rebutted.

Analysis: Transit passes obtained at the entry check-post had to be surrendered at the exit check-post under section 28B. The claimed onward dispatch from Kanpur by railway did not establish that the goods were the same goods covered by the transit passes. No prior intimation was given to the trade tax authorities before the alleged railway dispatch. The supporting material was found insufficient, and the claimed transactions were not satisfactorily verified. On these facts, the failure to surrender the transit passes remained unexplained and the presumption of intra-State diversion was not rebutted.

Conclusion: The penalty was rightly upheld and the revisions failed.

---