Transit goods and statutory presumption: confiscation sustained where no credible proof showed actual movement outside the State.

Goods ostensibly in inter-State transit may still be seized and confiscated under section 28(6) where surrounding circumstances indicate clandestine local sales and the goods are found in a transporter's godown or other place of business. The Court held that the provision is not limited to a registered dealer's premises and that the wide definition of dealer covers such conduct. It further held that the statutory presumption under section 29B was not rebutted because the owners failed to prove actual movement outside the State, and that notice and opportunity had been afforded. The confiscation orders were therefore restored and the Tribunal's contrary view was set aside.

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Issues: (i) Whether goods kept in a transporter's godowns while ostensibly in inter-State transit could be seized and confiscated under section 28(6) of the Andhra Pradesh General Sales Tax Act, 1957 when the surrounding materials suggested clandestine local sales. (ii) Whether the burden under section 29B of the Andhra Pradesh General Sales Tax Act, 1957 to prove that the goods had actually moved out of the State was discharged, and whether the confiscation orders suffered from lack of notice or opportunity.

Issue (i): Whether goods kept in a transporter's godowns while ostensibly in inter-State transit could be seized and confiscated under section 28(6) of the Andhra Pradesh General Sales Tax Act, 1957 when the surrounding materials suggested clandestine local sales.

Analysis: The confiscation scheme under sections 28, 29, 29A and 29B of the Act is aimed at preventing tax evasion. Section 28(6) is not confined to goods found at the premises of a registered dealer alone; it extends to goods found in a dealer's office, shop, godown, vehicle or other place of business and not accounted for in the manner required by law. The Court held that the Tribunal misdirected itself in treating section 28(6) as inapplicable merely because the goods were said to be in transit. The statutory definition of dealer is wide enough to cover a person carrying on business even without registration, and the transporter and consignor failed to produce credible materials showing bona fide inter-State movement. The surrounding facts, including the doubtful consignees, circuitous route, absence of proper records and the storage of large stocks in godowns, supported the inference of local sale and evasion.

Conclusion: Section 28(6) was held applicable, and the confiscation orders were sustained in favour of the Revenue.

Issue (ii): Whether the burden under section 29B of the Andhra Pradesh General Sales Tax Act, 1957 to prove that the goods had actually moved out of the State was discharged, and whether the confiscation orders suffered from lack of notice or opportunity.

Analysis: Section 29B creates a special statutory presumption that, if the transit-pass requirements are not complied with, the goods are deemed to have been sold within the State, and the burden lies on the owner or person in charge to prove actual movement out of the State. The Court held that this burden was not discharged. The documents, explanations and conduct of the parties did not rebut the presumption, and the Tribunal wrongly cast the burden on the Department. The Court also found that notices were issued, representations were received and considered, and the proceedings did not suffer from denial of opportunity so as to invalidate confiscation.

Conclusion: The statutory presumption under section 29B was not rebutted, and the plea of violation of natural justice was rejected.

Final Conclusion: The revisions succeeded, the Tribunal's order was set aside, and the confiscation orders were restored; the writ petition for payment of sale proceeds failed.

Ratio Decidendi: Where goods ostensibly in inter-State transit are not supported by credible proof of actual movement outside the State, the statutory presumption of local sale under the transit provisions operates, and confiscation under section 28(6) can be sustained even if the goods are found in a transporter's godown rather than in a registered dealer's premises.

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