2002 (6) TMI 583 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Lawfulness of the detention order.
2. Sustainability of the penalty order in law.

Issue-wise Detailed Analysis:

1. Lawfulness of the Detention Order:

The petitioner challenged the detention order dated March 11, 2001, regarding 29 bales of scoured mohair. The petitioner, a transporter, was intercepted by the Commercial Tax Officer, Durgapur Range, despite presenting consignment notes, bill of entry, and declaration. The trucks were detained due to a shortfall in the declared quantity of goods. The respondent argued that the petitioner should have obtained fresh consignment notes for the three trucks used instead of the initially planned two. The Tribunal found that the detention was initially lawful for verification purposes but became unlawful after 48 hours as per Rule 212 of the West Bengal Sales Tax Rules, 1995, since no seizure was made.

2. Sustainability of the Penalty Order in Law:

The penalty order dated March 13, 2001, was imposed under section 72 of the West Bengal Sales Tax Act, 1994, due to the alleged shortfall in goods. The petitioner argued that the goods were in transit from Germany to Ludhiana via West Bengal and were covered by a transit declaration. The Tribunal noted that the procedure for seizure was not followed, and the penalty was imposed without a valid seizure, which is required by law. The Tribunal held that the penalty was imposed under a wrong section and was not warranted by the facts of the case. The assumption that the shortfall indicated sales in West Bengal was unfounded, as the entire consignment reached its destination in Ludhiana.

Conclusion:

The Tribunal concluded that both the detention and penalty orders were not sustainable in law. The detention became unlawful after 48 hours without a proper seizure, and the penalty was imposed under an incorrect legal provision. Therefore, the orders dated March 11, 2001, and March 13, 2001, were set aside, and the cash security furnished by the petitioner was ordered to be refunded.

Separate Judgment:

D. Bhattacharyya (Technical Member) agreed with the judgment. The application was allowed, and the order was delivered in open court. A subsequent request for a stay of the order by the State Representative was rejected.