2003 (1) TMI 686 - AT - VAT and Sales Tax

Summary

Issues:
1. Is the transaction a sale in the course of export or merely sale for export?
2. Is the seizure dated September 7, 2001 under section 70 legal and valid?

Issue 1: Sale in the Course of Export
The petitioner, a registered dealer under the West Bengal Sales Tax Act, challenged the seizure of 250 cartons of ready-made garments by the Commercial Tax Officer. The petitioner claimed the goods were meant for export, supported by an alleged purchase order from a Delhi-based entity. However, the respondents argued that the sale was not in the course of export but an inter-State trade sale. The Tribunal found that the petitioner failed to establish a direct link between the sale and export, relying solely on a questionable letter. Without concrete evidence of export-related transactions, the petitioner was denied the benefit of the proviso clause of section 73(1) of the West Bengal Sales Tax Act, 1994.

Issue 2: Validity of Seizure
The Commercial Tax Officer seized the goods citing under-valuation, which the petitioner argued was beyond the officer's jurisdiction under rule 214C. The Tribunal examined previous judgments and rules governing the verification of goods' valuation during transportation. It was established that rule 214C did not explicitly permit verification of valuation, unlike rule 212(9) of the West Bengal Sales Tax Rules, 1995. The Tribunal held that the officer exceeded his jurisdiction by verifying the valuation, making the seizure invalid. Consequently, the Tribunal allowed the application, quashed the seizure of the garments, and ordered the release of any security furnished.

In conclusion, the judgment by the Appellate Tribunal of the West Bengal Taxation Tribunal addressed the issues of whether the transaction constituted a sale in the course of export and the legality of the seizure dated September 7, 2001. The decision clarified the lack of evidence linking the sale to export for the petitioner and deemed the seizure invalid due to the officer's unauthorized verification of valuation.