Rebuttable transit presumption fails when goods are proved delivered outside the State, defeating penalty for non-surrender of pass.

The rebuttable presumption under section 28-B applies only until the contrary is shown. Where the record establishes that the goods were actually delivered to the purchaser outside Uttar Pradesh, the presumption stands displaced. In that situation, non-surrender of the transit pass at the exit check post does not preserve the foundation for penalty under section 15-A(1)(q), because the alleged breach is no longer supported by the statutory presumption. On the stated facts, the penalty was not leviable.

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Issues: Whether penalty could be imposed for non-surrender of the transit pass at the exit check post when the goods were found to have been delivered to the purchaser outside Uttar Pradesh.

Analysis: The presumption under section 28-B regarding movement of goods through the State is rebuttable. On the material on record, the goods were found to have been delivered to the purchasing party at Bikaner in Rajasthan. Once that factual finding stood established, the statutory presumption stood rebutted. In those circumstances, even assuming that the transit pass was not surrendered at the exit check post, the foundation for levy of penalty under section 15-A(1)(q) did not survive.

Conclusion: The penalty was not leviable and the revision failed.

Ratio Decidendi: A penalty for alleged breach of the transit pass requirement cannot be sustained where the rebuttable presumption under section 28-B stands displaced by a finding that the goods reached and were delivered to the purchaser outside the State.

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