Transit pass presumption under U.P. Trade Tax Act depends on proved linkage to the assessee, not internal check-post entries alone.

Under section 28-B of the U.P. Trade Tax Act, liability based on non-surrender of a transit pass can arise only after the revenue first proves that the transit form relates to the assessee. Internal check-post entries such as Panji-3, standing alone and unsigned by the driver or person-in-charge, are insufficient to fasten tax liability without confronting the assessee with the relevant transit forms, G.Rs., or other corroborative material. The discussion also notes that the Tribunal's view on "parchun" goods was commercially unsound, but that error did not affect the result because the foundational linkage between the forms, the consignments, and the assessee was not proved.

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Issues: (i) Whether, in proceedings under section 28-B of the U.P. Trade Tax Act, the revenue could fasten liability merely on the basis of non-surrender of transit forms and internal check-post entries without confronting the assessee with the transit forms or other acknowledged documents linking them to the assessee; (ii) whether the levy could be sustained where the goods were described as "parchun" goods despite the Tribunal's view on that description.

Issue (i): Whether, in proceedings under section 28-B of the U.P. Trade Tax Act, the revenue could fasten liability merely on the basis of non-surrender of transit forms and internal check-post entries without confronting the assessee with the transit forms or other acknowledged documents linking them to the assessee.

Analysis: Section 28-B creates only a rebuttable presumption of sale inside the State when the transit pass is not surrendered. The presumption can operate only after the revenue first establishes that the transit form relates to the assessee. Where the assessee disputes any connection with the alleged transit forms or vehicles, the burden lies on the revenue to prove the linkage by confronting the relevant transit forms or other signed or acknowledged material. Entries in Panji-3 are only internal revenue records, are not signed by the driver or person-in-charge, and cannot by themselves bind the assessee. In the absence of confrontation of the forms, G.Rs. or corroborative evidence, the presumption could not safely be drawn.

Conclusion: The challenge succeeded in the cases where the alleged transit forms were not confronted and the linkage was not proved; the levy could not be sustained against the assessee in those matters.

Issue (ii): Whether the levy could be sustained where the goods were described as "parchun" goods despite the Tribunal's view on that description.

Analysis: The Tribunal's observation that "parchun" is not a separate commodity under the Trade Tax Act was found to be unsustainable in commercial understanding, as the expression denotes general merchandise goods. However, that error did not alter the result in the revenue revisions because the foundational defect remained: the revenue had failed to confront the transit forms and G.Rs. and had not proved that the alleged forms were obtained by the assessee or that the vehicles belonged to the opposite party.

Conclusion: The levy was not disturbed in the revenue's favour, and the revisions filed by the revenue failed.

Final Conclusion: The decision turned on the failure of the revenue to establish, through confronted and reliable material, that the disputed transit forms and connected consignments belonged to the assessee; on that footing, the assessee succeeded in the bulk of its revisions and the revenue's revisions were rejected.

Ratio Decidendi: A presumption under section 28-B of the U.P. Trade Tax Act arises only after the revenue proves that the transit form relates to the assessee, and internal check-post entries alone cannot sustain tax liability unless the underlying material is confronted or otherwise proved by corroborative evidence.

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