Export sale nexus and valuation checks under transport rules cannot justify seizure on under-valuation alone.

A sale is not treated as a sale in the course of export merely because the goods are eventually exported; the seller must show the required nexus and privity with the export transaction. On the facts, the documents only established movement of goods from West Bengal to Delhi, and the alleged purchaser's letter was not reliable, so the proviso to section 73(1) of the West Bengal Sales Tax Act, 1994 was not available. Seizure under rule 214C of the West Bengal Sales Tax Rules, 1995 could not be justified on alleged under-valuation because that rule permits checking transport documents, not market value; the seizure on that ground was therefore invalid.

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Issues: (i) Whether the transaction was a sale in the course of export so as to attract the proviso to section 73(1) of the West Bengal Sales Tax Act, 1994. (ii) Whether seizure of the goods on the ground of under-valuation was valid under rule 214C of the West Bengal Sales Tax Rules, 1995.

Issue (i): Whether the transaction was a sale in the course of export so as to attract the proviso to section 73(1) of the West Bengal Sales Tax Act, 1994.

Analysis: The transaction was found to be a movement of goods from West Bengal to Delhi on the basis of the documents produced, but the material necessary to establish that the petitioner's sale itself was inextricably linked with an export sale was absent. A solitary letter said to have been issued by the alleged purchaser was not accepted as reliable, especially as it was not referred to in the seizure report and did not establish the required privity of contract between the seller in the State and a foreign buyer. Mere eventual export of the goods was held insufficient to convert the petitioner's sale into a sale in the course of export.

Conclusion: The petitioner was not entitled to the benefit of the proviso to section 73(1) of the West Bengal Sales Tax Act, 1994.

Issue (ii): Whether seizure of the goods on the ground of under-valuation was valid under rule 214C of the West Bengal Sales Tax Rules, 1995.

Analysis: Rule 214C required production and verification of the way-bill, chalan and accompanying documents to see whether the consignment was being transported in contravention of the relevant statutory provisions. The provision did not confer power to verify the market value of the goods, unlike rule 212(9), which expressly contemplated valuation verification. The authority was therefore held to have travelled beyond the scope of rule 214C by seizing the goods solely on the basis of alleged under-invoicing.

Conclusion: The seizure on the ground of under-valuation was invalid and illegal.

Final Conclusion: The challenge succeeded and the seizure of the 250 cartons of ready-made garments was quashed, with consequential release of the security furnished, if any.

Ratio Decidendi: In the absence of an express statutory power, the checking authority cannot test the valuation of goods while acting under rule 214C, and seizure cannot be justified on alleged under-valuation alone.

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