TMI Blog2006 (8) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated July 13, 2006 passed by the same officer imposing penalty under section 77 of the VAT Act, 2003. Material facts leading to the impugned orders of seizure and penalty, in brief, are: On the basis of a high sea agreement for sale with M/s. Mahindra Intertrade Ltd., of Mumbai, an importer, the petitioner-company purchased 5 MT of roasted molybdenum ore concentrate (hereinafter referred to as, the disputed goods ). The petitioner-company through its clearing agent got the disputed goods released from Mumbai Port and delivered those goods to M/s. Nitco Roadways Ltd., (hereinafter referred to as, the transporter ) for transporting from Mumbai to petitioner-company's factory in Kolkata. According to the petitioner-company, it ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arhat Police Station informing that the transporter had verbally informed that the way bill was lost or misused by the truck driver. On the same day, i.e., July 3, 2006 the company sent a similar intimation to the Commercial Tax Officer, Taltala Charge. On July 5, 2006 the Assistant Commissioner, Central Section came to the company's godown, seized the disputed goods being 76 bags, each bag containing 50 kg. material under section 76(1) of the VAT Act, 2003 for contravention of section 73 of the said Act. After the disputed goods were seized the petitioner-company sent a letter dated July 6, 2006 to the Deputy Commissioner, Central Section, submitting a kind of explanation. In the said letter the company stated that the goods were un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out interception the company could have easily concealed the import of the goods and there was no need to approach the check-post authorities for endorsement on a second way bill. According to him unless the company sent its man along with the driver to the Chichira check-post on its own, the sales tax authorities could not have detected import of the disputed goods into West Bengal. The petitioner did not want to evade any payment of tax otherwise it would not have taken the risk of approaching the Chichira check-post. This Tribunal has held that penalty can be imposed if the infringement is intentional to creating an opportunity of evasion of tax unless the infringement is detected by the authorities. The object and purpose of obtainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that the petitioner wanted to avoid payment of tax. It appears to us that the company made such attempt in order to avoid seizure and penalty proceeding but not to avoid payment of tax because if the company succeeded in obtaining endorsement on the way bill, it was to account for the disputed goods and pay tax as payable in law. No dealer, who wanted to evade tax, would have come forward to get a way bill endorsed. Once the way bill was endorsed, possibility of evasion of tax would have ceased to exist. The company definitely did not act properly in unloading, unpacking and repacking the disputed goods without reporting and inviting sales tax authorities to inspect the disputed goods. The company even utilised a part of the disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in smaller quantities appears to be plausible. Although we find that there was no intention to evade payment of tax, we cannot but express our strong disapproval of the infringement and the manner in which it had been dealt with by the petitioner-company. Firstly, in case of loss or misplacement or non-availability of way bill or any other relevant material document the transporter or the importer should not jump the check-post under any circumstances and should report to the check-post authorities. Driver of the vehicle committed gross illegality in not stopping at the check-post. Secondly, when the petitioner-company came to learn that way bill was not produced for endorsement at the check-post, it should have immediately reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different manner and should have immediately reported the matter to the sales tax authorities instead of attempting to get another way bill endorsed. Upon instruction from the petitioner-company, Mr. Chakraborty also states that the petitioner-company is agreeable to pay a sum of Rs. 75,000 (as a kind of compensation) for the inappropriate manner in which the petitioner-company dealt with this matter. We have already held that this case does not come strictly under section 77 of the Value Added Tax Act, 2003 for the imposition of penalty but the kind of activities as pointed out hereinabove are required to be discouraged and disapproved. In the facts and circumstances, we accept the petitioner's submission that the company will pay a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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