Decided on April 01,2009

Cal -Cox Syndicate (P) Limited Appellant
Commissioner Of Commercial Taxes And Anr. Respondents


DIPAK CHAKRABORTI - (1.) IN this application filed under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicant, Cal -Cox Syndicate Private Limited, a company falling within the meaning of the Companies Act, 1956, has challenged the order dated January 9, 2009 passed by the Sales Tax Officer, Central Section (in short, "the STO/CS") imposing a penalty of Rs. 3,16,63,140 under Section 79 of the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act") for violation of the provision of the VAT Act.
(2.) The applicant is an authorized customs clearing and forwarding agent. It was engaged by Inox Air Products Limited, Bokaro, Jharkhand, for clearing air separation plant imported in parts at Kolkata port. The applicant loaded the items in eleven trailers. For such transportation, the applicant obtained eleven transit declarations (in short, "TDs") which included TD Nos. 1082, 1083,1085,1086 all dated January 22, 2008. These TDs were meant for goods worth of Rs. 1,50,22,620, Rs. 1,40,85,380, Rs. 4,30,15,336 and Rs. 4,30,15,336, respectively. Due to failure on the part of the applicant -company to produce TDs endorsed at the exit check -post, Duburdih, STO/CS initiated a penalty proceedings under Section 79 of the VAT Act. Sri S. C. Sen, learned advocate appearing along with Mrs. Swapna Das, advocate on behalf of the applicant, challenged the notice as well as the order of imposition of penalty. It was argued by the learned advocate that since the drivers driving the vehicles in question were new, they were not conversant with the formalities required to be observed in transporting goods on the strength of TDs. As has already been stated that TDs were issued on January 22, 2008 and the consignments were received by the Bokaro Steel Plant at Bokaro on January 24, 2008, there was no intention on the part of the applicant to evade payment of taxes. In fact, the items so transported are parts of a single machine, i.e., air separation plant and these different parts, as has been claimed by the learned advocate, do not have any commercial value separately. It was stressed that before the authorities concerned xerox copies of the acknowledgement received and signed by the consignee, i.e., Bokaro Steel Plant, Bokaro, consignment notes and way -bills issued by the Jharkhand sales tax authority were produced. The learned advocate drew our attention to the opening lines of Section 73 which states "to ensure that there is no evasion of tax ...." no person is permitted to transport any consignment from prescribed places or from any other places except in accordance with the restrictions and conditions as may be prescribed. Rule 80 provides regulatory measures for transporting of goods through West Bengal. In compliance with the provision of Section 80, the applicant submitted a declaration declaring therein that the goods would be delivered at Bokaro and Duburdih as exit check -post. These TDs were duly signed by the Sales Tax Officer posted at K P Dock. It was argued by the learned advocate that simply because of the authorities concerned had the power to impose penalty they were not supposed to exercise such powers mechanically without considering the facts and circumstances of the case. It was pointed out that altogether eleven TDs were issued of which only in respect of four TDs there was alleged violation of the provision of Section 73 of the VAT Act. All the documents produced subsequently established the fact that the items in question transported on the strength of the disputed TDs were not sold in West Bengal and moreover, those were delivered to the ultimate buyer, i.e., Bokaro Steel Plant. Even admitting that there was violation but it was purely technical and venial in nature and did not call for imposition of penalty to the extent of Rs. 3,16,63,140. The authorities concerned failed to appreciate the facts and circumstances of the case and were hell bent upon to impose penalty disregarding the realities of the case. It was, therefore, prayed that the order of imposition of penalty be quashed.
(3.) SRI T. N. Banerjee, learned State Representative appearing on behalf of the respondent -authorities, contested the application and submitted that the TDs were issued on January 22, 2008. The consignment left West Bengal through Duburdih check -post on the same date and alleged to have been received by the Bokaro Steel Plant on January 24, 2008. But that the TDs had not been endorsed at the exit point check -post were not brought to the notice of the authorities concerned. As per provision of Sub -section (4) of Section 80, it is incumbent upon the transporter, carrier or transporting agent or any other person to produce the TDs before the authorities at the last check -post before the exit of the vehicle with such goods from West Bengal. This was not complied with. Moreover before initiation of the penalty proceedings, no intimation had been given to the issuing authorities that the goods have actually exited West Bengal. The learned State Representative also drew our attention to the submission made by the learned advocate that relevant way -bills endorsed by the sales tax authorities of Jharkhand had been produced before the authorities concerned. In fact all the way -bills produced were blank in terms of items, quantity and value of the goods as well as invoice number, vehicle number and entry check -post name. There was no seal and signature of the Jharkhand sales tax authorities on the body of those way -bills by which it could be established that the goods at all entered into the State of Jharkhand. He further drew our attention that the instant applicant is a habitual offender in the matter of compliance with the statutory provisions. Even after observation of this Tribunal in earlier cases, the applicant was not diligent enough in the matter of compliance with the statutory provisions. In view of this, it was argued by the learned State Representative that there is no defect in the order of STO/CS but as regards the quantum of penalty, he left it open to the Tribunal for taking a decision.;

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