Rebuttable statutory presumption for intra-State sale fails when evidence shows goods actually moved outside the State.

The statutory presumption under section 28AA(4) of the Karnataka Sales Tax Act, 1957 that goods were sold within the State on failure to surrender a transit pass is rebuttable. Where credible evidence showed actual movement of the goods to Pondicherry, including departmental verification and certification, and the consignor's assessment had already attained finality on that basis, the Revenue could not sustain the presumption without contrary proof. The revisional authority was therefore not justified in restoring tax and penalty merely because the transit pass was not surrendered. The presumption stood displaced, and the revisional order was unsustainable.

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Issues: Whether the statutory presumption under section 28AA(4) of the Karnataka Sales Tax Act, 1957 could be rebutted by evidence showing actual movement of the goods outside the State, and whether the revisional order restoring tax and penalty was sustainable.

Analysis: The statutory scheme under section 28AA requires the person in charge of the vehicle to obtain and surrender the transit pass, and failure to comply raises a presumption that the goods were sold within the State. That presumption is rebuttable. The record showed that the consignor's assessment had already been completed on the basis that the goods were accounted for and reached Pondicherry, supported by departmental verification and certification. Once the assessment of the consignor had attained finality and the Department had not established that the consignment remained within Karnataka or that the presumption was not displaced, the revisional authority could not ignore the rebuttal material or restore the levy merely on the basis of non-surrender of the transit pass.

Conclusion: The presumption stood rebutted, and the revisional order setting aside the appellate order was unsustainable. The appeal was rightly allowed in favour of the assessee.

Ratio Decidendi: A rebuttable statutory presumption as to intra-State sale cannot survive where credible evidence establishes actual out-of-State movement of the goods and the relevant assessment has attained finality without contrary proof by the Revenue.

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