2008 (1) TMI 861 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Challenge to orders of penalty imposed by the Commercial Tax Officer, Assistant Commissioner of Commercial Taxes, and Deputy Commissioner of Commercial Taxes.
2. Non-production of endorsed transit declaration forms.
3. Determination of whether there was an attempt to evade tax.
4. Appropriateness of penalty imposition and its quantum.

Issue-wise Detailed Analysis:

1. Challenge to Orders of Penalty:
The applicant challenged the orders dated August 29, 2004, by the CTO/CCP in transit declaration Case Nos. 628/03-04-CCP and 629/03-04/CCP, and subsequent orders by the ACCT/KP Range and DCCT/KP Range. The penalties were imposed due to the applicant's failure to produce endorsed transit declaration forms as required by section 72(4) of the West Bengal Sales Tax Act, 1994.

2. Non-production of Endorsed Transit Declaration Forms:
The applicant admitted that the endorsed copies of the documents were misplaced, thus violating section 72(4). However, it was contended that the goods were received by the ultimate customer in Bangladesh, supported by a certificate from Punjab National Bank confirming the realization of money from the importer.

3. Determination of Tax Evasion Attempt:
The Tribunal noted that it was undisputed that the goods were exported out of West Bengal and not sold within the state. The Tribunal emphasized that penalty imposition should not be mechanical and must consider whether the violation created an opportunity for tax evasion. The Tribunal referenced previous judgments, including Cal-Cox Syndicate Pvt. Ltd. v. A.C.C.T., Kharagpur Range, which highlighted that penalties should not be imposed if the infringement does not impact revenue collection.

4. Appropriateness of Penalty Imposition and Its Quantum:
The Tribunal found that while there was negligence in not producing the endorsed transit declaration forms, there was no possibility of tax evasion. The Tribunal criticized the applicant's negligence but concluded that the penalty was not justified as there was no adverse impact on revenue. The Tribunal exercised discretion to set aside the penalty orders, subject to the applicant paying Rs. 20,000 as a deterrent measure.

Conclusion:
The Tribunal set aside the impugned penalty orders, requiring the applicant to pay Rs. 20,000 as deterrence by January 31, 2008. The applications were disposed of with no order as to costs.