Limited check-post jurisdiction cannot decide branch transfer versus inter-State sale; penalty beyond power.

Section 14-B of the Punjab General Sales Tax Act gives a check-post officer only a limited power to verify transit documents, detain goods for procedural non-compliance, and proceed to penalty where an attempt to evade tax is found after enquiry. That summary jurisdiction does not extend to deciding the substantive character of the transaction. Where the real dispute is whether the movement of goods is a branch transfer or an inter-State sale, the officer cannot act as an assessing authority. An order imposing penalty on that basis is beyond jurisdiction and unsustainable.

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Issues: (i) Whether the check-post authority had jurisdiction under Section 14-B(7)(ii) of the Punjab General Sales Tax Act, 1948 to determine the nature of the transaction and impose penalty on the basis that the movement of goods was an inter-State sale rather than a branch transfer.

Analysis: Section 14-B is a check-post and information-collection provision intended to ensure that goods in transit are accompanied by proper and genuine documents. The power to detain goods and proceed to penalty is confined to cases where the statutory requirements under sub-sections (2) and (4) are violated and where, after enquiry, the officer finds an attempt to avoid or evade tax. The check-post officer cannot assume the role of the assessing authority or decide the substantive character of the transaction. If the documents accompanying the goods are produced and the dispute is really about whether the movement amounts to branch transfer or inter-State sale, that question lies outside the limited summary jurisdiction under Section 14-B.

Conclusion: The authority had no jurisdiction to determine the nature of the transaction in such proceedings, and the penalty order was beyond power and unsustainable. The issue is decided in favour of the assessee.

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