Transit detention and penalty for imported goods fail when verification limits and seizure procedure are not properly followed.

Transit detention of imported goods supported by lorry challan, consignment note and transit declaration is permissible only for the limited verification period. If the statutory seizure procedure is not followed, continued detention becomes unlawful, especially where the authorities rely only on an unsupported assumption of local sale and the consignment ultimately reaches its destination. Penalty action must also proceed under the correct statutory provision and on evidence of breach; a penalty imposed under an inapplicable provision, or on no proof that the missing goods were sold in West Bengal, is unsustainable. The detention and penalty orders were quashed and the cash security was directed to be returned.

---

---

Issues: (i) Whether the detention of the vehicles carrying imported goods in transit through West Bengal was lawful; (ii) Whether the penalty imposed under section 72 of the West Bengal Sales Tax Act, 1994 was sustainable in law.

Issue (i): Whether the detention of the vehicles carrying imported goods in transit through West Bengal was lawful

Analysis: The goods were imported from Germany, cleared at Kolkata port, and were being transported to Ludhiana with the relevant lorry challan, consignment note, and transit declaration. The officer had authority to intercept and detain the vehicles for verification under the regulatory scheme governing transit movement, but detention beyond the permissible verification period could continue only if the statutory procedure for seizure was followed. No seizure was made, and the officer proceeded on an unsupported assumption that the shortfall indicated local sale. The materials also showed that the entire consignment ultimately reached its destination.

Conclusion: The initial detention was lawful, but the prolonged detention after expiry of the permissible period was unlawful and unsustainable.

Issue (ii): Whether the penalty imposed under section 72 of the West Bengal Sales Tax Act, 1994 was sustainable in law

Analysis: Penalty was imposed under section 72 on the footing that the shortfall in the vehicles established a violation and implied sale within West Bengal. The Tribunal found that section 72 was not the proper provision for this transit movement and that the procedure contemplated for detention, seizure, and penalty was not followed. There was no evidence that the missing bales had been sold in West Bengal, and the later reliance on section 71B could not apply because that provision came into force only after the date of detention.

Conclusion: The penalty order was not sustainable in law and had to be set aside.

Final Conclusion: The application succeeded, the detention and penalty orders were quashed, and the cash security was directed to be returned or refunded.

Ratio Decidendi: Where transit goods are supported by the required documents, detention may be maintained only for the limited verification period and any penal action must follow the prescribed seizure procedure under the correct statutory provision; a penalty based on unsupported assumptions and an inapplicable provision is illegal.

---