1989 (4) TMI 311 - AT - VAT and Sales Tax

Summary

Issues:
- Imposition of penalty under section 7(2) of the West Bengal Sales Tax Act, 1954 for bringing goods without a permit.
- Question of limitation.
- Validity and legality of penalty imposition.
- Reduction of penalty amount.
- Authority to review quantum of penalty.
- Refund of excess penalty amount.

Imposition of Penalty:
The judgment pertains to an application against the imposition of a penalty under section 7(2) of the West Bengal Sales Tax Act, 1954 for bringing goods without a permit. The applicant's goods were seized at a check-post despite producing a permit valid until a later date due to a communication gap between offices. The penalty was initially set at Rs. 93,000, which was progressively reduced to Rs. 50,000 by the Commercial Taxes Tribunal. The Tribunal further reduced the penalty to Rs. 10,000 considering the circumstances and the applicant's compliance.

Question of Limitation:
Although the question of limitation was raised by the respondents in the affidavit, it was not pursued during the proceedings.

Validity and Legality of Penalty Imposition:
The applicant attempted to challenge the validity and legality of the penalty imposition for the first time during the hearing. However, this issue was not raised before the lower authorities. The applicant's advocate eventually conceded to not press this question and instead focused on requesting a reduction in the penalty amount.

Reduction of Penalty Amount:
The respondents argued that the penalty was rightfully imposed due to negligence on the part of the applicant. Despite paying the penalty promptly, the applicant sought a reduction. The Tribunal, considering the communication gap and the applicant's clean record, reduced the penalty to Rs. 10,000 from the initial amount of Rs. 93,000.

Authority to Review Quantum of Penalty:
The State Representative contended that the Tribunal lacked the authority to review the quantum of penalty, citing precedents from the Madras and Punjab and Haryana High Courts. However, the Tribunal disagreed, asserting its jurisdiction under the West Bengal Taxation Tribunal Act, 1987 to intervene in cases of unfair penalty amounts.

Refund of Excess Penalty Amount:
The Tribunal ordered the refund of the excess penalty amount of Rs. 83,000 to the applicant within two months. The judgment concluded by disposing of the application without any costs, with unanimous agreement among the Tribunal members.

This judgment highlights the Tribunal's authority to review penalty amounts, the importance of considering circumstances in penalty imposition, and the need for proper exercise of discretion by the authorities.