Transit goods seizure requires statutory non-compliance; documented goods moved before exit time could not be detained on suspicion alone.

Goods in transit through a State cannot be seized before the declared exit time merely on suspicion when the prescribed transit declaration form and supporting documents are available and there is no positive finding of loading or unloading within the State. The statutory scheme authorises seizure only where goods are unaccounted for, lack the required documents, or involve the prescribed undervaluation threshold; absent such non-compliance, a presumption of local sale does not arise. Where the seizure is unsupported by statutory authority, the illegality is jurisdictional, and revisional interference is permissible to set aside the unlawful orders. The seizure and consequential orders were therefore invalid.

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Issues: (i) Whether goods in transit through the State could be seized before the expiry of the declared exit time when the prescribed transit documents were available and there was no finding of loading or unloading within the State. (ii) Whether the revisional court could interfere where the seizure and the orders affirming it were vitiated by jurisdictional error.

Issue (i): Whether goods in transit through the State could be seized before the expiry of the declared exit time when the prescribed transit documents were available and there was no finding of loading or unloading within the State.

Analysis: The statutory scheme permits seizure only where the goods are not accounted for, are not accompanied by the prescribed documents, or are undervalued beyond the prescribed limit. The transit provisions create a presumption of local sale only when the required documents are absent or not properly maintained. Here, the goods were accompanied by the transit declaration form and other documents, and there was no finding that the goods were loaded or unloaded within the State. The seizure was also made before the declared exit time had expired. Mere suspicion based on past conduct, the sequence of bilty and invoice, or a perceived discrepancy in weight did not establish the statutory basis for seizure.

Conclusion: The seizure of the goods was not justified and was contrary to the statutory scheme.

Issue (ii): Whether the revisional court could interfere where the seizure and the orders affirming it were vitiated by jurisdictional error.

Analysis: The challenge was not to a mere finding of fact but to the authority of the seizure itself. Once the seizure was found to lack statutory foundation, the illegality went to jurisdiction. In such a case, the limited revisional power could still be exercised to set aside the unlawful orders.

Conclusion: Interference in revision was permissible because the impugned orders suffered from jurisdictional error.

Final Conclusion: The seizure and the consequential orders were set aside, the assessee's challenge succeeded, and the revenue's connected revision failed.

Ratio Decidendi: Goods in transit through the State, when accompanied by the prescribed documents and detained before the declared exit time, cannot be seized in the absence of positive evidence of loading or unloading within the State or other statutory non-compliance.

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