Invalid seizure and penalty for transported consignments where check-post endorsement and disclosed consignee details defeated alleged contravention.

Goods transported after endorsement of the cargo manifest by check-post authorities, with particulars of the owners or consignees furnished to the sales tax authorities, were found not to be in contravention of the transport requirements under the West Bengal Sales Tax Act, 1994. On that factual basis, seizure under section 70(2) lacked legal support and was quashed for the five consignments. Because the alleged breach of section 68 was not established, the foundation for penalty under section 71(1) also failed, and no penalty could be sustained against the transporter or applicant-company in respect of those consignments. Relief was confined to the five unreleased consignments, with liberty to proceed afresh in accordance with law.

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Issues: (i) Whether the seizure of the five disputed consignments under the West Bengal Sales Tax Act, 1994 was valid. (ii) Whether penalty could be imposed on the transporter under section 71(1) of the West Bengal Sales Tax Act, 1994 in respect of those consignments.

Issue (i): Whether the seizure of the five disputed consignments under the West Bengal Sales Tax Act, 1994 was valid.

Analysis: The consignments had been transported to the warehouse after the cargo manifest had been endorsed by the check-post authorities. The object of the statutory scheme was to prevent evasion of tax, and the record showed that particulars of the owners or consignees had been furnished to the sales tax authorities. No finding was recorded that those particulars were false or unreal. On those facts, the transportation could not be treated as a contravention of section 68, and seizure under section 70(2) lacked legal basis.

Conclusion: The seizure of the five disputed consignments was illegal and invalid and is quashed.

Issue (ii): Whether penalty could be imposed on the transporter under section 71(1) of the West Bengal Sales Tax Act, 1994 in respect of those consignments.

Analysis: Penalty proceedings are quasi-judicial in nature. Since the transportation was not in contravention of section 68 on the facts found, the foundation for penalty under section 71(1) did not survive. The applicant-company was not shown to be liable as owner of the goods, and the circumstances did not justify the penalty imposed on it for the five unreleased consignments.

Conclusion: No penalty could be imposed on the applicant-company under section 71(1) in respect of the five disputed consignments.

Final Conclusion: The impugned seizure and penalty were set aside only in relation to the five unreleased consignments, while liberty was reserved to proceed afresh in accordance with law.

Ratio Decidendi: Where goods are transported with the knowledge and endorsement of the check-post authorities and the owners or consignees are identified, seizure and penalty cannot be sustained in the absence of a proved contravention of the statutory transport requirements.

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