Transit seizure cannot rest on mere suspicion about consignor or consignee where documents are otherwise in order.

Goods in transit supported by transit declarations and accompanying documents could not be seized merely because the consignor and consignee were alleged to be non-existent or not genuine. The relevant test was whether the transit documents were in order and whether there was material showing intended intra-State sale or tax evasion; mere suspicion about the parties was insufficient. On that basis, the seizure was held unjustified and the demand for security as a condition for release was unsustainable. The goods were directed to be released forthwith without insisting on security.

---

---

Issues: Whether goods in transit could be seized merely on the basis that the consignor and consignee were alleged to be non-existing or not genuine, and whether security could be demanded for release of the seized goods.

Analysis: The goods were accompanied by transit declaration and other documents. The seizure was founded only on the assumption that the consignor and consignee were non-existing. The legal position applied was that for seizure of goods in transit, the existence of the consignor or consignee, or their registration status, is not by itself decisive. What matters is whether the transit documents are in order and whether there is any material showing intended sale inside the State or evasion of tax. Where the documents are in order, seizure cannot be justified merely on suspicion about the parties to the transaction.

Conclusion: The seizure was unjustified and the demand of security for release of the goods was unsustainable. The seized goods were ordered to be released forthwith without insisting on security.

---