Seizure on mere suspicion fails where goods are office assets shifted on business closure, not a sale consignment.

Seizure of goods and demand for security under the U.P. Trade Tax Act were held unsustainable where old office equipment was being shifted on closure of business and the challan stated the goods were not for sale. The power under section 13A(4) could be used only on material showing a case of possible tax evasion, not on mere suspicion. The authorities also proceeded on an incorrect assumption about registration, instead of examining whether the person concerned was a dealer within the statutory definition and whether the seizure conditions were actually met. On the facts, the consignment was treated as transfer of office assets rather than a sale.

---

---

Issues: Whether the seizure of goods and the demand for security under section 13A(4) of the U.P. Trade Tax Act, 1948 were sustainable in the absence of material showing that the consignor was a dealer carrying on business in the State and that the goods were meant for sale.

Analysis: The goods consisted of old office equipment being shifted on closure of the business and were accompanied by a challan stating that they were not for sale. The circumstances, including the nature of the goods and the closure of the unit, indicated that the consignment was a transfer of office assets and not a transaction of sale. Section 13A(4) could be invoked only where there was material to justify seizure in aid of preventing tax evasion, and not merely on suspicion. The authorities also proceeded on the erroneous footing that the applicant was not a registered dealer, whereas the statutory inquiry was whether the person concerned was a dealer within the meaning of section 2(c) and whether the case satisfied section 13A(4). No finding based on evidence showed that the applicant was carrying on business in the State so as to attract the seizure power.

Conclusion: The seizure and consequential security order were unsustainable and illegal; the revision was allowed in favour of the assessee.

Ratio Decidendi: Power of seizure under section 13A(4) of the U.P. Trade Tax Act, 1948 cannot be exercised merely on suspicion; it requires material showing that the consignor answers the statutory definition of dealer and that the case falls within the conditions justifying seizure.

---