SWASTIC TRADING CORPORATION Vs. SALES TAX OFFICER, KHARAGPUR RANGE AND ORS.

JUDGEMENT

(2.) THIS is an application under Section 8 of the West Bengal Taxation Tribunal Act, 1987. In this application, pnership firm, namely, Swastic Trading Corporation having its registered office at 210, Jamunalal Bazar Street, Kolkata -700 007 has challenged the order dated August 24, 2007 of the Sales Tax Officer, Kharagpur Range (in short, "STO/KP Range") in the matter of seizure of 148 cartons of polyester filament yarn. The petitioner has also challenged the order dated August 24, 2007 of STO/KP Range imposing penalty of Rs. 1,77,600. The revisional order dated September 6, 2007 passed by the Assistant Commissioner of Commercial Taxes, Kharagpur Range (in short, "ACCT/KP Range") confirming imposition of penalty as mentioned hereinabove has also been challenged.

(3.) HOWEVER , upon prayer of the driver of the vehicle, the hearing was taken up on August 24, 2007 and STO/KP Range imposed a penalty of Rs. 1,77,600 under Sub -section (1) of Section 77 of the VAT Act, 2003. Thereafter, the petitioner preferred a revision before the ACCT/KP Range against the order of seizure as well as the order of penalty of STO/KP Range. The ACCT/KP Range by an order dated September 6, 2007 confirmed the order of seizure as well as the imposition of penalty.

(4.) SMT . Chandrima Bhattacharya, learned Advocate appearing on behalf of the petitioner, submitted that in view of the provision of Rule 99 of the West Bengal Value Added Tax Rules, 2005 (in short, "the VAT Rules"), production of way -bill is not necessary in respect of non -taxable goods. Schedule A to the VAT Act, 2003 details the list of such goods in respect of sales of which no tax is payable. Hosiery yarn is mentioned against item 20D of the said Schedule and, therefore, the goods were being imported into West Bengal under the bona fide belief that no way -bill was required for the purpose. She also drew our attention to a decision of this Tribunal in RN -256 of 2007 in respect of the present petitioner in Swastik Trading Corporation v. STO : [2010] 28 VST 233 (WBTT). In that case, the petitioner was importing 201 boxes of polyester yarn for the purpose of selling those yarns to the manufacturer of hosiery goods. After taking into consideration the relevant facts, the Tribunal by its order dated August 7, 2007 set aside the order of seizure and accordingly in this case too the order as well as the imposition of penalty cannot be sustained on that ground. The learned advocate also drew our attention to an order dated December 13, 2005 of the Commissioner of Commercial Taxes passed in case No. 24X/RO/VAT/2005/13 in respect of Sri Mahabir Spinning Mills Limited, 55, Canal East Road, Beliaghata, Kolkata 700 085. While passing the order under Section 102 of the VAT Act, it was held by the Commissioner that "both cotton hosiery yarn and polyester hosiery yarn are covered by the said entry 20D of Schedule A and, therefore, no tax is payable on sale of cotton hosiery yarn and polyester hosiery yarn". Furthermore, it was held "as hosiery yarn has been specified by name in Schedule A, it is also held that hosiery yarn is not included in the goods specified in column (2) against serial No. 6 in column (1) of Part 1 of Schedule C". In view of the order of the Tribunal as well as the views expressed by the Commissioner of Commercial Taxes, as aforesaid, it was contended by the learned advocate that the order of seizure as well as imposition of penalty was not proper and hence be set aside.