Transit pass presumption under sales tax law supports assessment of the dealer when actual ownership and sale are proved.

Non-surrender of a transit pass at the exit check-post under the Kerala General Sales Tax Act gives rise to a rebuttable presumption that goods were delivered within the State for sale. Where the department proves that the petitioners were the actual purchasers, owners and dealers, assessment may be made on them under the charging and assessment provisions read with section 30B(2). The deeming liability under section 30B(3) fastens responsibility on the driver or vehicle owner only when the real dealer is not identified or proved. On these facts, assessment on the petitioners was upheld and liability was not confined to the driver or owner.

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Issues: Whether the petitioners, as the actual purchasers and sellers of the goods in Kerala, could be assessed under section 17(3) read with section 30B(2) of the Kerala General Sales Tax Act, 1963, or whether liability could arise only against the driver or owner of the vehicle under section 30B(3).

Analysis: Section 30B(2) creates a presumption that goods are delivered within the State for sale when the transit pass is not surrendered at the exit check-post. That presumption is rebuttable, but once the department establishes that the petitioners were the purchasers, owners and dealers in the goods, and that the goods were moved through Kerala without surrender of the transit pass, the assessment can be made on the actual dealer under the charging and assessment provisions. Section 30B(3) operates as a protective deeming provision to fasten liability on the driver or owner of the vehicle only where the actual dealer who carried on the business is not identified or proved. The vehicle owner or driver is not the substantive dealer when the real dealer is established.

Conclusion: The assessment on the petitioners under section 17(3) read with section 30B(2) was valid, and the contention that only the driver or owner could be assessed was rejected.

Ratio Decidendi: Where the actual dealer who purchased, owned and sold the goods in the State is proved, liability may be assessed on that dealer on the basis of the statutory presumption arising from non-surrender of the transit pass; the deeming liability of the driver or owner under the transit-pass provision applies only when the real dealer is not identified.

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