Rebuttable presumption for transit goods fails when delivery outside the State is proved, defeating penalty for non-surrender of forms

A statutory presumption that goods not accounted for at the exit check post were sold within the State is rebuttable, and it falls once reliable evidence shows delivery of the goods at an out-of-State destination. After such evidence is accepted, the burden shifts back to the Department to prove that the goods did not leave the State. Penalty could not be sustained merely because transit forms were not surrendered at the exit check post when proof of delivery outside the State had rebutted the presumption.

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Issues: Whether penalty under Section 15A(1)(q) could be sustained merely because the transit forms were not surrendered at the exit check post, and whether the presumption under Section 28B stood rebutted once evidence showed receipt of the goods at the destination outside the State.

Analysis: Section 28B creates only a rebuttable presumption that goods not accounted for at the exit check post were sold within the State. That presumption is not conclusive and stands displaced when the assessee produces reliable evidence showing that the goods were in fact delivered at the out-of-State destination. Once such evidence is accepted, the burden shifts back to the Department to establish that the goods had not exited the State. Penalty cannot be imposed on the footing that the entire onus remained with the assessee despite proof of delivery outside the State.

Conclusion: The presumption under Section 28B was rebutted and the penalty could not be sustained.

Final Conclusion: The revisions succeeded and the penalty orders and appellate and tribunal orders were set aside.

Ratio Decidendi: A statutory presumption under Section 28B is rebuttable, and once the assessee adduces reliable evidence showing that the goods crossed the State and were delivered outside the State, penalty cannot be maintained merely for failure to surrender the transit documents.

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