1996 (3) TMI 504 - AT - VAT and Sales Tax

Issues Involved:
1. Validity of the seizure of goods.
2. Opportunity to produce permits.
3. Alleged evasion of tax.
4. Compliance with procedural requirements for seizure.

Detailed Analysis:

1. Validity of the Seizure of Goods:
The applicants challenged the validity of the seizure of their goods on May 3, 1995, under section 70(1) of the West Bengal Sales Tax Act, 1994 ("the 1994 Act"). The respondents contended that the seizure was valid and in accordance with the law, as the vehicle carrying the goods reached the check-post on May 1, 1995, and the goods were seized only on May 3, 1995, after the driver failed to produce the necessary permits within the statutory 24-hour period. The Tribunal held that the vehicle indeed reached the Berma check-post on May 1, 1995, at 7.20 p.m., as evidenced by the seizure report, and the applicants' contention to the contrary was rejected due to lack of evidence.

2. Opportunity to Produce Permits:
The applicants argued that the driver was not given sufficient time to produce the necessary permits, and relied on the decision in Hindusthan Lever Limited v. State of West Bengal, which suggested that at least 24 hours should be given to produce the permits. The Tribunal noted that the 1994 Act, effective from May 1, 1995, provides for a maximum of 24 hours to produce the permits, which was complied with in this case. The vehicle reached the check-post on May 1, 1995, and the seizure was made on May 3, 1995, after more than 24 hours had elapsed without the permits being produced. Therefore, the statutory requirement was met, and the authorities acted in conformity with the law.

3. Alleged Evasion of Tax:
The applicants contended that there was no reason for the authorities to suspect evasion of tax, as the driver voluntarily reached the check-post and the vehicle had not crossed it. The Tribunal noted that the 1994 Act provides for seizure if permits are not produced within 24 hours of the goods reaching the check-post. The Tribunal also referenced several decisions, including Keshardeo Santhalia v. State of West Bengal and Positive Commercial Co. Ltd. v. State of West Bengal, which were not applicable to the present case as they dealt with different circumstances. The Tribunal held that there was no infringement of the applicants' fundamental rights or Article 301 of the Constitution, as the seizure was made in accordance with the law.

4. Compliance with Procedural Requirements for Seizure:
The applicants argued that the seizure was invalid as it did not comply with the provisions of section 70 of the 1994 Act read with rule 207 of the West Bengal Sales Tax Rules, 1995 ("the 1995 Rules"), which require compliance with the Code of Criminal Procedure, 1973. Specifically, they contended that there were no witnesses to the seizure, violating section 100(4) and (5) of the Code. The Tribunal noted that rule 207(1) of the 1995 Rules requires seizures to be made "as far as possible" in accordance with the Code, indicating that strict compliance is not mandatory. The Tribunal held that the provisions of the Code do not apply to seizures at a check-post, which is an open place, and the absence of witnesses does not vitiate the seizure. The Tribunal distinguished the present case from previous decisions, such as Deoralia Brothers v. State of West Bengal and Harinarayan Singh v. I.C.T., Barasat Charge, which dealt with seizures from business premises.

Conclusion:
The application was dismissed, and the Tribunal held that the seizure was valid, the statutory requirements were met, and there was no violation of the applicants' rights. The sum of Rs. 84,000 deposited and the bank guarantee of Rs. 2,00,000 furnished by the applicant would abide by the result of the penalty proceedings.

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