2010 (3) TMI 865 - SC - VAT and Sales Tax

Restrictions on the movement of goods - evasion of tax - show-cause notice was issued to the appellant by the Assistant Commissioner of Commercial Taxes alleging contravention of section 68 of the Act - Section 71B read with section 68 of the Act indicates that if the declarant undertakes delivery of the consignment with an obligation to transport such consignment of goods to its destination outside West Bengal and if he contravenes any restrictions or conditions prescribed under rule 211A of the Rules read with the declaration, then such person becomes liable to pay penalty on ad valorem basis Held that - sub-rule (6) applies to a declarant transporter, CHA, clearing and forwarding agent or any person taking delivery of the consignment of goods from the port for despatch of the same outside West Bengal. Further, clause (4) of the declaration refers to an obligation being undertaken by the declarant that the delivery is required to be taken by him for transporting such consignment to its destination outside West Bengal. Hence, with the making of the declaration, the appellant undertook the obligation to transit the consignment to the destination outside the State for which the proof was the countersigned copy of the declaration, appeal dismissed

Summary

Issues Involved:
1. Scope and effect of section 68(3) of the West Bengal Sales Tax Act, 1994, read with sub-rule (6) of rule 211A of the West Bengal Sales Tax Rules, 1995.
2. Applicability of the term "any person" in section 68(3) of the Act.
3. Responsibility of a Customs House Agent (CHA) under section 68 of the Act.
4. Legal presumption of tax evasion due to non-production of the endorsed copy of the declaration.
5. Applicability of sections 68, 71B, and 72 of the Act to a CHA.
6. Request for instalments in case of penalty imposition.

Detailed Analysis:

1. Scope and Effect of Section 68(3) of the Act and Rule 211A(6) of the Rules:
The court examined the scope and effect of section 68(3) of the West Bengal Sales Tax Act, 1994, and sub-rule (6) of rule 211A of the West Bengal Sales Tax Rules, 1995. Section 68(3) allows any consignment of goods to be transported by any person after furnishing particulars in the prescribed form. Rule 211A outlines the procedure for transporting goods from ports or check-posts to destinations outside West Bengal. The court emphasized that these provisions aim to prevent tax evasion and ensure compliance with regulatory measures.

2. Applicability of the Term "Any Person" in Section 68(3):
The court clarified that the term "any person" in section 68(3) includes clearing and forwarding agents, transporters, and customs house agents (CHA). This term is not limited to transporters alone. The court highlighted that the regulatory measures under the Act are designed to prevent tax evasion and that any person making a declaration in the prescribed form must comply with the Act's provisions.

3. Responsibility of a Customs House Agent (CHA) Under Section 68:
The appellant, a CHA, contended that he had no obligation under section 68 regarding the transportation of goods. However, the court held that the appellant, as a declarant, undertook the obligation to transport the consignment to its destination outside West Bengal. The declaration made by the appellant included a statutory obligation to ensure the goods reached their final destination. Failure to produce the endorsed copy of the declaration raised a legal presumption of tax evasion.

4. Legal Presumption of Tax Evasion Due to Non-Production of the Endorsed Copy:
The court noted that non-production of the endorsed copy of the declaration before the assessing authority raised a legal presumption of tax evasion. The appellant failed to provide evidence to rebut this presumption. The court emphasized that the regulatory measures under the Act are integral to the charging provisions and are intended to prevent tax evasion.

5. Applicability of Sections 68, 71B, and 72 of the Act to a CHA:
The appellant argued that sections 68, 71B, and 72 of the Act applied only to transporters and not to CHAs. The court rejected this argument, stating that once a CHA makes a declaration, he assumes the role of a transporter. The court clarified that the term "transporter" in sections 72 and 73 is specifically defined for those sections and does not exclude CHAs from the obligations under section 68.

6. Request for Instalments in Case of Penalty Imposition:
The appellant requested the court to allow payment of the penalty in instalments if the appeal was rejected. The court did not express any opinion on this request and dismissed the civil appeal with no order as to costs.

Conclusion:
The court dismissed the civil appeal, holding that the appellant, as a declarant, had an obligation to transport the goods to their destination outside West Bengal and that failure to produce the endorsed copy of the declaration raised a legal presumption of tax evasion. The court emphasized the importance of compliance with the regulatory measures under the Act to prevent tax evasion.