Mandatory transit pass compliance under Rajasthan VAT sustained tax and penalty where no pass was produced for the disputed goods.

Failure to obtain and produce the requisite transit pass for goods carried through Rajasthan under the VAT scheme triggered a statutory presumption that the goods were sold within the State, enabling the authority to levy tax and impose penalty after giving an opportunity of hearing. The transit-pass requirement was treated as mandatory and requiring strict compliance. Because the petitioner produced a pass only for one set of goods, while none was shown for the goods in question, the later affidavit and documents did not rebut the presumption. The factual findings recorded by the assessing authority and Tax Board were not interfered with, and the tax and penalty were sustained.

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Issues: Whether penalty and tax were rightly sustained for failure to obtain and produce the requisite transit pass for goods carried through the State under the Rajasthan Value Added Tax Act.

Analysis: The statutory scheme required the owner, driver or person in charge of a vehicle carrying goods through the State to obtain a transit pass from the first check-post and deliver it at the last check-post. On failure to do so, a presumption arose that the goods had been sold within the State, and the competent authority could levy tax and impose penalty after affording an opportunity of being heard. The Court held that the requirement was mandatory and had to be strictly complied with. The petitioner had obtained a transit pass only for one set of goods, while no transit pass was produced for the goods in question. The affidavit and later produced documents did not dislodge the statutory presumption, and the findings recorded by the assessing authority and the Tax Board were treated as factual findings not warranting interference.

Conclusion: The tax and penalty were upheld, and the writ petition was dismissed.

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