Floor-rate circulars cannot conclusively prove undervaluation to justify detention of goods in a completed intra-state sale.

Floor-rate circulars for chicken and day-old chicks were held to apply only for advance tax collection in appropriate cases and not as a universal benchmark for sale price or invoice value. Intra-state transport of goods arising from a completed, tax-suffered sale could not be detained merely on an allegation of undervaluation based on that floor-rate, because interception powers are aimed at attempted evasion and penalty proceedings, not reassessment. The detaining officer could not expand the detention mechanism into an assessment function. On that basis, detention and any security deposit demanded solely by reference to the floor-rate were impermissible.

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Issues: Whether intra-state transport of day old chicks could be detained, and security deposit demanded, merely on the basis of undervaluation with reference to a floor-rate fixed by the Commissioner.

Analysis: The circulars prescribing floor-rates were held to operate only for collection of advance tax in appropriate cases and could not be treated as a universal benchmark for the sale price of goods. Detention under the provision governing interception of goods is intended to address attempted evasion and penalty proceedings, but in intra-state transport arising from a completed tax-suffered sale, there was no warrant to insist on advance tax on the footing of anticipated sale. The prescribed floor-rate for chicken and day old chicks was relevant, if at all, to the statutory scheme concerning anticipated sales and not to determine the invoice value for assessment or detention on the facts of the case. The power of the detaining officer could not be expanded into the function of the assessing officer by treating the floor-rate as conclusive of undervaluation.

Conclusion: Detention of day old chicks could not be sustained merely on the basis of undervaluation with reference to the Commissioner-fixed floor-rate, and any security deposit demanded on that basis was impermissible.

Ratio Decidendi: A floor-rate circular issued for advance tax purposes cannot be used as conclusive proof of undervaluation for detention of goods in a completed intra-state sale, and the detaining authority cannot assume the role of the assessing authority.

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