1998 (2) TMI 571 - AT - VAT and Sales Tax

Issues Involved:
1. Validity of the seizure of the excavator machine.
2. Imposition of penalty under Section 71 of the West Bengal Sales Tax Act, 1994.
3. Legality and arbitrariness of the orders passed by the respondent authorities.

Detailed Analysis:

1. Validity of the Seizure of the Excavator Machine:

The applicants, a registered partnership firm and its partner, challenged the seizure of their excavator machine by the Inspector at Burma check-post in Purulia district on the grounds of non-production of a sales tax permit. The respondents argued that an excavator is included in Schedule IV of the 1994 Act, necessitating a sales tax permit for importation into West Bengal. Since the machine was imported without such a permit, the seizure was deemed valid under Section 70 of the Act. The Tribunal found that the entry of the excavator into West Bengal without the necessary permit or declaration was in contravention of Section 68, justifying the seizure. The Tribunal noted that regulatory measures relating to permits and declarations are mandatory and any infraction attracts the mischief of seizure under Section 70.

2. Imposition of Penalty under Section 71 of the West Bengal Sales Tax Act, 1994:

The applicants contended that the penalty imposed by the respondent authorities was unwarranted as the machine was for their own use and not for sale. The respondents, however, alleged that the machine was being transported under the pretense of being destined for Assam, indicating mala fide intent to evade tax. The Tribunal observed that the applicants failed to produce a valid consignment note, and the documents presented by the driver were found to be fake. The Tribunal emphasized that the applicants' plea of innocence and indictment of the driver for producing fake documents were factual issues already negated by the fact-finding authorities. The Tribunal concluded that the initiation of the penalty proceeding was justified and the imposition of penalty was not arbitrary.

3. Legality and Arbitrariness of the Orders Passed by the Respondent Authorities:

The applicants sought a declaration that the seizure and the orders passed in the penalty proceeding were illegal and invalid. The Tribunal examined whether the orders imposing penalty suffered from illegality or arbitrariness. It was found that the applicants' defense for not obtaining the permit was unconvincing and that the conduct of the applicants did not evoke confidence. The Tribunal noted that the applicants tried to pass off fabricated documents as genuine, which did not fit the plea of innocence and bona fide action. Consequently, the Tribunal upheld the orders of the respondent authorities, finding no cogent reason to reduce the penalty further.

Quantum of Penalty:

The Tribunal considered the valuation of the excavator, which was Rs. 38,78,160 according to the invoice, and the purchase price on hire at Rs. 41,25,000. The initial penalty of Rs. 10,00,000 was reduced to Rs. 4,50,000 by the revisional authority. The Tribunal found no reason to reduce the penalty further, considering the circumstances discussed.

Costs:

The Tribunal awarded a cost of Rs. 1,000 to be paid by the applicants to respondent No. 1 within three weeks.

Conclusion:

The application was dismissed with a cost of Rs. 1,000. The judgment was agreed upon by both members of the Tribunal.

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