Material undervaluation in transit can justify seizure despite production of transit documents under the VAT rules.

Material undervaluation of goods in transit can justify seizure under rule 107(5)(b) of the West Bengal Value Added Tax Rules, 2005, even where the transporter has produced the required transit documents. The requirement to produce the consignor's purchase documents was not enforceable against the transporter, but the record showed the invoice value of jeera was substantially below the prevailing market price at the relevant time and place. That discrepancy provided substantive grounds for action, so the seizure and form 60 notice were treated as valid despite one stated ground being extraneous.

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Issues: Whether the seizure of the goods in transit and the notice in form 60 were illegal when the transporter had produced the required transit documents, but the authorities found a material undervaluation of the goods.

Analysis: The goods were being transported from one place in West Bengal to another, and the documents required under rule 107 of the West Bengal Value Added Tax Rules, 2005 were carried and produced. The demand for the consignor's purchase documents was not relevant against the transporter. However, the authorities had material on record showing that the invoice value of jeera was substantially below the prevailing market price at the relevant place and time. That discrepancy furnished substantive ground for action under rule 107(5)(b) of the West Bengal Value Added Tax Rules, 2005. In those circumstances, the seizure could not be treated as vitiated merely because one of the stated grounds was extraneous.

Conclusion: The seizure and the notice in form 60 were held to be legal and valid, and the application failed.

Ratio Decidendi: Material undervaluation of goods in transit can justify seizure under rule 107(5)(b) of the West Bengal Value Added Tax Rules, 2005, even where the transporter has produced the required transit documents and is not responsible for explaining the consignor's import or purchase documents.

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