Court overturns seizure & penalty under Sales Tax Act, finding lawful purchase. Goods released, penalty quashed.

The court overturned the seizure of goods and penalty imposed under the West Bengal Sales Tax Act, 1994, finding it unlawful due to the legitimate purchase of goods with proper documentation by the petitioner's Delhi branch. The court held that storing part of the goods in a godown did not contravene the relevant rule. The seizure was deemed unjustified, and the penalty and revisional orders were overturned. The goods were ordered to be released, the penalty demand notice quashed, and the bank guarantee released, granting relief to the petitioner without costs.

---

---

Issues:
Challenge of seizure of goods and imposition of penalty under the West Bengal Sales Tax Act, 1994.

Analysis:
The application challenged the seizure of 386 cartons of umbrella and the penalty imposed under section 71 of the West Bengal Sales Tax Act, 1994. The petitioner's branch office in Delhi purchased 553 cartons of umbrella panels from a foreign supplier in China, with proper documentation. Upon reaching Calcutta Port, 167 cartons were transported to Delhi, while 386 remained in a godown due to a lack of a long route truck. The respondent undertook a search and seized 2,073 cartons, imposing a penalty exceeding Rs. 5,00,000, later reduced to Rs. 2,00,000. The petitioner argued the seizure was unlawful, as there was no intent to evade tax and the relevant rule was not applicable at the time. The respondent contended the seizure was justified due to non-compliance with rule 211 and lack of counter-signing of the bill of lading.

The main consideration was whether the seized goods were purchased by the Delhi branch under legitimate documents and if storing part of the goods in a godown contravened rule 211. All relevant documents confirmed the goods were imported by the Delhi branch, with proper endorsement by the Inspector of Commercial Taxes. The rule required the production of specific documents, which were presented and endorsed in this case. The petitioner's obligation to produce way-bills was discussed, highlighting the absence of such a requirement for goods transported through West Bengal as a corridor.

The judgment concluded that the seizure based on non-production of way-bills was unlawful, setting it aside. The penalty imposed and revisional orders were also overturned. The goods were ordered to be released, the demand notice for penalty quashed, and the bank guarantee released. The application was disposed of without costs, affirming the petitioner's entitlement to relief.

---