2005 (3) TMI 737 - AT - VAT and Sales Tax

Tribunal emphasizes intent in tax penalty case, upholds seizure legality

The Tribunal directed further consideration by the second revisional authority regarding the imposition of a penalty under the West Bengal Sales Tax Act, ... - Issues:1. Imposition of penalty by the Commercial Tax Officer and its confirmation in revision.2. Alleged lack of deliberate intention to evade tax by the petitioner.3. Legality of the seizure of goods due to violation of tax provisions.4. Request for release of seized goods by the petitioner.Imposition of Penalty:The petitioner challenged the order imposing a penalty, arguing that there was no deliberate intention to evade tax. The lawyer contended that a clear finding of mala fide intention is required for penalty under section 68 of the West Bengal Sales Tax Act, 1994. The Tribunal observed that such a finding was not clearly made by the seizing officer or the first revisional authority. The matter was directed to be considered by the second revisional authority, emphasizing the necessity of determining the petitioner's intention to evade tax before imposing a penalty.Alleged Lack of Intention to Evade Tax:The petitioner, representing the Central Public Works Department, claimed that the absence of way-bill endorsement was a mistake, not an attempt to evade tax. The Tribunal acknowledged the submissions but highlighted the need for a conclusive determination of deliberate intent to evade tax before penalizing the petitioner under the Act. The lack of a clear finding on this aspect led to the direction for further consideration by the second revisional authority.Legality of Seizure due to Violation of Tax Provisions:The State Representative justified the seizure of goods due to the violation of section 68 read with rule 211, asserting the legality of the penalty imposition. The Tribunal concurred with the legality of the seizure, emphasizing compliance with tax rules and regulations. However, it stressed the importance of establishing deliberate intent before enforcing penalties under the tax laws.Request for Release of Seized Goods:Considering the perishable nature of the goods and the potential impact on construction, the petitioner sought the release of the seized goods. The Tribunal directed the seizing officer to release the goods upon receiving an undertaking from a responsible officer of the department. The release was conditioned on the Executive Engineer's commitment to abide by the revision's outcome. The petitioner was allowed to file a revisional application within 15 days for further review.In conclusion, the Tribunal disposed of the application without costs, highlighting the necessity of a clear finding on deliberate tax evasion intent before imposing penalties. The legality of the seizure was upheld, emphasizing compliance with tax regulations, while also addressing the petitioner's request for the release of goods pending further proceedings.