Rebuttable transit-pass presumption limits penalty when evidence shows goods actually crossed the State and reached the consignee.

Section 28-B of the U.P. Trade Tax Act creates only a rebuttable presumption that goods were sold within the State if the transit pass is not surrendered at the last check post. That presumption can be displaced by material showing that the goods actually crossed the State and were delivered to the consignee. Penalty cannot be sustained merely on non-surrender of Form 34 without examining the assessee's evidence on merits. Where the Tribunal ignored the relevant proof and relied only on the missing transit pass, its order was liable to be set aside and the matter required fresh consideration.

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Issues: Whether penalty for non-surrender of the transit pass at the exit check post could be sustained when the assessee produced evidence to show that the goods had actually crossed the State and were delivered to the consignee.

Analysis: Section 28-B of the U.P. Trade Tax Act creates a rebuttable presumption that goods are sold within the State if the transit pass is not delivered at the last check post. That presumption is not conclusive. If the dealer produces material showing that the goods actually moved of the State and were delivered to the consignee, the burden is discharged and the presumption stands rebutted. The evidentiary material relied upon by the assessee had to be examined on merits. The Tribunal sustained the penalty only on the ground that Form 34 was not surrendered and did not consider the relevant evidence.

Conclusion: The penalty order could not be sustained without examining whether the statutory presumption under Section 28-B stood rebutted on the evidence produced by the assessee. The Tribunal's order was liable to be set aside and the matter required fresh consideration.

Ratio Decidendi: A presumption under a transit-check post provision is rebuttable, and penalty cannot be sustained merely for non-surrender of the transit pass if evidence shows that the goods had actually crossed the State.

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