Rebuttable presumption under transit provisions fails when internal check-post entries are unsupported by authenticated records

A rebuttable presumption of intra-State sale under the transit provisions could not be invoked unless the Revenue first proved, with authenticated material, that the transit form related to the assessee. Internal check-post entries in panji 3, being unsigned and unsupported by the original form XXXIV or signed record, were insufficient to bind the assessee. As the Revenue failed to establish the necessary linkage and the assessee was not confronted with the original documents, the adverse inference could not stand and the assessment was unsustainable.

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Issues: Whether, on non-surrender of transit form XXXIV, a presumption of intra-State sale could be raised against the assessee on the basis of entries in panji 3 where the original form XXXIV and the original signed record were not confronted to the assessee.

Analysis: Section 28B of the U.P. Trade Tax Act, 1948 creates only a rebuttable presumption intended to prevent tax evasion. The presumption can arise only after it is primarily established that the transit form in question was obtained by the assessee and was not surrendered at the exit check-post. Where the assessee disputes the linkage of the alleged form with it, the burden rests on the Revenue to prove that the information relates to the assessee by producing the relevant form or other authenticated material. Panji 3 is an internal revenue record, does not bear the signature of the driver or person-in-charge, and by itself cannot bind the assessee. Since the original form XXXIV and the signed original record were not confronted, and the Revenue failed to discharge the burden of corroborating the entries, the adverse inference could not be sustained.

Conclusion: The presumption of sale could not validly be drawn on the basis of unsigned panji 3 entries and the assessment made on that basis was unsustainable.

Final Conclusion: The revision succeeded and the assessment orders were set aside because the statutory presumption under section 28B was not properly established against the assessee.

Ratio Decidendi: A rebuttable statutory presumption of intra-State sale under transit provisions cannot be invoked against an assessee unless the Revenue first proves, with authenticated material, that the transit documents relate to that assessee; internal check-post entries alone are insufficient when the assessee disputes the connection.

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