1995 (2) TMI 409 - AT - VAT and Sales Tax

Summary

Issues:
- Imposition of penalties for non-production of declaration under rule 89AA of Bengal Sales Tax Rules and section 14C of Bengal Finance (Sales Tax) Act.
- Interpretation of the term "first check-post" in relation to the obligation to produce declaration in form XXXC.
- Assessment of penalties at the maximum rate of 25% of the determined saleable value of goods.

Detailed Analysis:
The case involved applications challenging penalties imposed for non-production of declaration in accordance with rule 89AA of the Bengal Sales Tax Rules and section 14C of the Bengal Finance (Sales Tax) Act. Three cases were considered together, where consignments of zeera were detained for non-production of declaration. Penalties ranging from Rs. 2,31,466.25 to Rs. 2,84,560 were imposed by the C.T.O. in each case. The penalties were confirmed in revisions, leading to the present applications before the Tribunal. The applicant, a transporter, argued that due to delays in revisions, the goods were sold within West Bengal, making him liable for tax under section 14C(14) instead of penalties. Additionally, the applicant contended that the first check-post for obtaining declaration was not reached due to the route taken by the trucks. The State's position was that the transporter should have produced the declaration at the point of interception or detention, even if not obtained from the first check-post. The Tribunal interpreted the term "first check-post" as the nearest check-post from the point of entry into West Bengal, rejecting the argument that detention was illegal. The Tribunal held that the penalties were governed by section 14C(1) to (6) and not section 14C(14).

Regarding the assessment of penalties at the maximum rate of 25% of the determined saleable value of goods, the applicant argued that the saleable value was determined excessively. After hearing arguments, the Tribunal decided to reduce the penalties by 50% in each case to meet the ends of justice. The penalties were reduced to Rs. 1,40,420, Rs. 1,33,387, and Rs. 1,15,733 for the three cases respectively. Any excess amount paid by the applicant was directed to be refunded within four weeks, and if no penalty was paid, the applicant was instructed to pay the reduced amounts within the same timeframe. The sum deposited previously for obtaining declarations or transit permits was to be adjusted against the assessment of tax for the relevant transactions. The applications were disposed of without any order for costs.

In conclusion, the Tribunal allowed the applications, reducing the penalties by 50% in each case and providing instructions for refund or payment of the adjusted amounts within a specified timeframe.