Transit goods with proper documents cannot be seized on mere suspicion about dealer genuineness or sealed-package contents.

Transit goods accompanied by the prescribed documents cannot be seized merely because the consignor or consignee is alleged to be non-existent or not genuine, unless a statutory transit violation is shown. Where the transit declaration form and other papers were in order, there was no allegation of route deviation, overstay, missing documents, tampering, extra packages, or package discrepancies, and the exit period had not expired, seizure was not justified. The seizure and consequential rejection of the assessee's challenge were set aside, and release of the goods was directed without security.

---

---

Issues: (i) whether goods in transit through the State could be seized on the ground that the consignor and consignee were allegedly non-existent or not genuine; (ii) whether seizure was justified when the goods were accompanied by the requisite documents and the time for exit from the State had not expired.

Issue (i): whether goods in transit through the State could be seized on the ground that the consignor and consignee were allegedly non-existent or not genuine

Analysis: Seizure of transit goods is permissible only on the statutory grounds relating to transit violations. Where the goods are accompanied by bills, bilities and the transit declaration form, and there is no allegation that the route was deviated from, the goods overstayed, or the documents were absent, the genuineness or registration status of the selling and purchasing dealers is not a material ground for seizure.

Conclusion: The seizure could not be sustained on the ground that the dealers were non-existent or not genuine, and this aspect was decided in favour of the assessee.

Issue (ii): whether seizure was justified when the goods were accompanied by the requisite documents and the time for exit from the State had not expired

Analysis: The transit declaration form disclosed 119 packages and there was no finding of extra packages, broken packages, replacement of goods, or any discrepancy in the packages themselves. Verification of pieces inside sealed packages was not a valid basis for seizure in the absence of a finding that the packages had been tampered with. The goods were also seized immediately upon entry, before the disclosed exit time expired, and therefore no presumption could arise that they were intended for sale inside the State.

Conclusion: The seizure was illegal because the goods were covered by the documents and the exit period had not expired, and this issue was decided in favour of the assessee.

Final Conclusion: The orders of seizure and the consequential orders rejecting the representation and appeal were set aside, and the goods were directed to be released forthwith without security.

Ratio Decidendi: Transit goods accompanied by the prescribed documents cannot be seized merely on suspicion about the genuineness of the consignor or consignee, or on internal item-wise verification of sealed packages, unless a statutory transit violation or tampering with the consignment is shown.

---