Inter-State transit pass goods could not be treated as local sales; detention failed and release was allowed on payment of fine.

Goods covered by a manually generated transit pass in an inter-State transaction could not be treated as intended for a local sale, so the local-sale tax demand based on detention was not sustained. The only defect noted was the absence of the consignor's or consignee's signature on the transit pass, and release of the detained goods was directed on payment of a fine of Rs. 2,000.

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Issues: Whether the detained goods transported under a manually generated transit pass in an inter-State transaction could be treated as liable to local-sale tax and whether the goods were to be released on payment of fine.

Analysis: The goods were covered by a manually generated transit pass and the transaction was found to be inter-State in nature. In such circumstances, the demand could not be sustained as if the movement was meant for a local sale. The only lapse noticed was the absence of signature of the consignor or consignee, for which a fine of Rs. 2,000 was considered appropriate.

Conclusion: The detention was not sustained as a basis for treating the transaction as local sale, and the detained goods were directed to be released on payment of Rs. 2,000 by the petitioner.

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