2007 (9) TMI 588 - AT - VAT and Sales Tax

Whether the applicant had existence of business on June 5, 2007 and/or on March 20, 2007 at her declared place of business? Held that - Both the applications are allowed on contest without cost. The impugned order of cancellation of the certificates of registration is set aside, the seizure of the hand pumps and pump parts being found illegal, the impugned order dated June 19, 2007 imposing penalty under section 77 of the WB VAT Act, 2003 is set aside. The seized goods except 36 PVC suction pipe each containing 25 kg valued at ₹ 54,000 stand released to the custody of the applicant and the bond furnished by the applicant would stand discharged provided the applicant returns the PVC suction pipe or deposit the value thereof within 15 days hereof to the respondent-sales tax authority. In default the respondents are at liberty to enforce the bond furnished by the applicant.

Summary

Issues: Existence of business at declared place, legality of seizure, legality of penalty order.

Existence of Business at Declared Place:
The judgment revolves around the existence of business at the declared place of the applicant on specific dates. The first application questions the seizure of goods on June 15, 2007, under the West Bengal Value Added Tax Act, 2003, due to alleged non-existence of the consignor at the declared place of business. The second application challenges the cancellation of the registration certificate on the grounds of no business activities, lack of office space, and using a residential premises as the declared place of business. The Sales Tax Officer formed an opinion based on an enquiry report that highlighted the absence of essential business elements at the declared place. The applicant argued that she maintained an office at the declared place and stored goods there, contending that the law does not mandate a separate office or warehouse for registration.

Legality of Seizure and Penalty Order:
The legality of the seizure of goods and the subsequent penalty order was questioned based on the alleged non-existence of the consignor at the declared place of business. The Sales Tax Officer's decision was influenced by the absence of business activities, office space, and a warehouse at the declared place. However, the applicant maintained that the absence of a separate office or warehouse did not invalidate the registration certificate. The judgment emphasized that the grounds for seizure and penalty failed once the issue of false representation for obtaining the registration certificate was dismissed. Consequently, both applications were allowed, the penalty order was set aside, and most of the seized goods were ordered to be released to the applicant.

Conclusion:
The judgment concluded by setting aside the impugned order of cancellation of the registration certificate, declaring the seizure of goods illegal, and nullifying the penalty order imposed under the West Bengal VAT Act, 2003. The Technical Member concurred with the decision, and the seized goods, except for specific items, were directed to be released to the applicant, subject to certain conditions. The judgment highlighted that filing a defective return or not issuing way-bills did not signify the non-existence of the place of business, ultimately ruling in favor of the applicant on all contested issues.