2005 (2) TMI 804 - AT - VAT and Sales Tax

Summary

Issues:
Seizure of goods, imposition of penalty, non-compliance with tax rules.

Seizure of Goods:
The petitioner, a registered dealer, purchased goods locally and was transporting them to a consignee when the goods were seized by respondent No. 1 on the grounds of suspected fake bills and failure to produce certain documents. The petitioner argued that all necessary documents were provided to the driver, as required by law. The seizure was deemed arbitrary and illegal as there was no contravention of relevant provisions of the West Bengal Sales Tax Act, 1994 and the Rules, 1995. The Tribunal found that the seizing officer acted illegally by seizing the goods without proper legal grounds, leading to the seizure being set aside.

Imposition of Penalty:
A penalty of Rs. 70,000 was imposed on the petitioner for alleged non-compliance with tax rules. The petitioner contended that there was no violation of the Act and Rules as all required documents were in possession of the driver during transportation. The Tribunal agreed with the petitioner's argument, stating that the penalty was arbitrary and without legal sanction. Consequently, the demand for penalty was deemed invalid, and the amount paid was ordered to be refunded to the petitioner.

Non-Compliance with Tax Rules:
The State Representative argued that the seizure was justified due to the petitioner's failure to produce certain documents related to the transportation of goods. However, the Tribunal found that the relevant provisions of the Act and Rules did not mandate the production of additional documents such as stock registers for seizure. The Tribunal concluded that the seizure was made illegally and set it aside, directing the refund of the penalty amount. The application was allowed without any order for costs.