2005 (2) TMI 788 - AT - VAT and Sales Tax

Summary

Issues:
1. Seizure of pay loader by tax authorities
2. Imposition of penalty for violation of the West Bengal Sales Tax Act, 1994
3. Allegations of tax evasion and illegal seizure

Analysis:

Issue 1: Seizure of pay loader by tax authorities
The petitioner's pay loader, purchased from Tamil Nadu for delivery in Assam through West Bengal, was seized by respondent No. 1 on November 30, 2004, for non-production of a way bill. Despite relevant documents being presented at the check-post, the pay loader was seized, leading to penalty imposition. The petitioner argued that all necessary documents were shown, and the fault lay with the check-post authorities for not endorsing the required rubber stamp. The State Representative contended that the petitioner violated the Act by not having a transit declaration, justifying the seizure and penalty. The Tribunal found that the seizure was unjust as the petitioner did not intend to evade tax, and the negligence of check-post authorities in not following proper procedures led to the illegal seizure.

Issue 2: Imposition of penalty for violation of the West Bengal Sales Tax Act, 1994
Following the seizure, a penalty of Rs. 13,04,524 was imposed by respondent No. 1, which was upheld in revision by respondent No. 2. The petitioner argued that all relevant documents were in order, and the penalty was unjust. The State Representative maintained that the petitioner breached the Act by not having a transit declaration and justified the penalty. The Tribunal held that the penalty was unwarranted as the petitioner had complied with requirements, and the fault lay with the check-post authorities for not following proper procedures.

Issue 3: Allegations of tax evasion and illegal seizure
The crux of the matter was whether the petitioner had the intent to evade tax. The petitioner contended that the seizure was illegal as all documents were presented, and the fault lay with the authorities for not following procedures. The State Representative argued that the petitioner violated the Act by not having a transit declaration, justifying the seizure. The Tribunal concluded that the seizure was unjust, as the petitioner did not intend to evade tax, and the negligence of check-post authorities led to the illegal seizure.

In conclusion, the Tribunal deemed the seizure and subsequent penalty as unjust and invalid, setting aside all orders related to the seizure. The petitioner was directed to arrange for the pay loader's exit by a specified date, failing which the authorities were granted the liberty to seize the pay loader. The application was disposed of without costs, with both parties instructed to comply with the order.