Court clarifies liability under section 30B of Sales Tax Act, emphasizes transit pass requirement

The court dismissed the revision petition, affirming the order under revision at the admission stage. It clarified the interpretation of section 30B of the Kerala General Sales Tax Act, emphasizing the requirement of obtaining and surrendering a transit pass for goods passing through the State. The court held that liability for tax payment under section 30B rests with the owner of the goods, emphasizing the need to establish the bona fides of transport to avoid tax assessment. The reliance on a form C declaration to negate tax liability was dismissed, highlighting the statutory presumption created by section 30B unless proven otherwise.

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Issues:
1. Interpretation of section 30B of the Kerala General Sales Tax Act, 1963 regarding transit pass requirements for goods passing through the State.
2. Liability of the vendor for tax assessment under the Act.
3. Impact of a form C declaration under the Central Sales Tax Act on liability for tax assessment.

Interpretation of section 30B:
The case involved a revision under section 41 of the Kerala General Sales Tax Act, challenging an order by the Kerala Agricultural Income-tax and Sales Tax Appellate Tribunal. The issue revolved around the requirement of obtaining a transit pass under section 30B for goods passing through Kerala. The sub-sections of section 30B were analyzed, emphasizing the need for obtaining and surrendering a transit pass at entry and exit points in the State. Failure to surrender the pass at the exit point leads to the presumption that the goods were sold within the State, triggering tax assessment under the Act.

Liability of the vendor:
The petitioner, a vendor of goods, contested liability for tax assessment under the Act, arguing that as the goods were sold against a C form under the Central Sales Tax Act, it was an inter-State sale, and the petitioner should not be held accountable for explaining the movement of goods post-sale. However, the court held that liability for tax payment under section 30B rests with the owner, driver, or person-in-charge of the transporting vehicle, as declared in sub-section (3) of the Act. The failure to establish the bona fides of transport, including the exit of goods from Kerala, makes the owner of the goods liable for assessment.

Impact of form C declaration:
The petitioner's reliance on the form C declaration to establish the bona fides of transport and avoid tax liability was dismissed by the court. The court emphasized that the burden of proving the truth of the declaration lies with the parties claiming its benefit. The statutory presumption created by section 30B dictates that unless the exit of goods is proven, it is presumed that the goods were sold within Kerala. In the absence of contrary evidence, a mere form C declaration does not override this statutory presumption.

In conclusion, the court dismissed the revision petition, affirming the order under revision at the admission stage. The judgment clarified the interpretation of section 30B, upheld the liability of the owner for tax assessment, and highlighted the limitations of relying solely on a form C declaration to negate tax liability under the Act.

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