Pradipta Ray J. (Chairman)
1. The petitioner, Coal India Ltd., is a Central Government undertaking and fully owned by the Government of India. In course of its business the petitioner purchased 635 kgs. of coal cutting machinery from a company in United Kingdom for their use in Western Coal Fields Ltd., a subsidiary company of the petitioner in Madhya Pradesh. Said consignment of coal cutting machinery was imported through air at Netaji Subhas Chandra Bose International Airport for sending the same to Madhya Pradesh using West Bengal as corridor. After clearance of the consignment at Kolkata airport the petitioner-company obtained transit declaration (T. D.) No. 163 dated May 2, 2008 declaring that the goods would go out of West Bengal within 21 days, that there might be trans-shipment of the goods at 88 Pathuria Ghat Street, Kolkata and that the vehicle carrying the said consignment would exit through Chichira check-post.
2. As no transit declaration was produced at the exit check-post for endorsement within a period of 21 days and no exit confirmation was received, the Sales Tax Officer, Central Section (respondent No. 1) issued a notice in form 62 under rule 127 of the West Bengal Value Added Tax Rules, 2005 (in short, "the VAT Rules") why penalty should not be imposed on it.
3. At the time of hearing of the penalty proceeding the petitioner''s authorised representative appeared and produced one letter from the Coal India''s Kolkata office stating that the consignment duly reached delivery site in Madhya Pradesh and was delivered there, xerox copies of a signed challan and consignment note to support the said claim of delivery.
4. It appears that the Sales Tax Officer was not satisfied with the documents produced by the petitioner''s representative. It has been recorded by the Sales Tax Officer that he demanded several other supporting documents but the authorised representative failed to produce those. If appears that the concerned officer wanted documents from other States which would show that the goods crossed West Bengal and entered Orissa and Madhya Pradesh in course of transport. The Sales Tax Officer mentioned certain discrepancies and defects. He has pointed out that vehicle No. mentioned in the transit declaration is different from the one mentioned in consignment note and that no consignment number was mentioned in the transit declaration. The Sales Tax Officer did not accept that the disputed consignment reached its destination in Madhya Pradesh and by his order dated May 4, 2009 imposed a penalty of Rs. 5,63,590.
5. Against the said penalty order dated May 4, 2009 the petitioner preferred a revision before the Joint Commissioner, Commercial Taxes, Central Section. At the time of hearing of the revision the representative of the petitioner presented a written submission along with documents to support its claim of exit of the goods from West Bengal. The Joint Commissioner by his order dated August 19,2009 dismissed the revision and confirmed the penalty order.
6. Being aggrieved the petitioner has approached this Tribunal with the present application.
7. The learned advocate for the petitioner has submitted that the violation was just technical and the goods, having been duly sent out of West Bengal, presumption of sale within West Bengal, if any, was rebutted. According to him, as there was no possibility of suffering loss of revenue, imposition of penalty was wholly unjustified and unreasonable.
8. Mr. Banerjee, learned State Representative, has submitted that the petitioner could not prove that the disputed consignment was actually sent out of West Bengal. He also pointed out that the petitioner was in the habit of not complying with the provision for presentation of T. D. at the exit check-post for endorsement and had to pay notional penalty on several occasions but imposition of notional penalties did not really deter it from repeating such violations in future.
9. Infringement is undisputed. If T. D.s are not presented at the exit check-post for endorsement obviously a presumption arises that goods did not exit and those had been sold in West Bengal surreptitiously without payment of tax. T. D. amounts to an undertaking that the goods would be transported out of West Bengal within the period mentioned in the T. D. and those will not be kept in West Bengal. If an importer can establish that the goods were actually sent out of the State infringement does not have any real impact on the revenue. At the same time it cannot be forgotten that statutory Rules are meant to be observed and one should not be permitted to disregard statutory provisions repeatedly.
10. In the present case respondent No. 1 did not accept the claim that the goods were actually sent out of West Bengal. The revisional authority (respondent No. 2) did not think it necessary to consider the said claim. He just recorded that the petitioner presented written submission with some documents in support of such claim. Respondent No. 2 proceeded on the basis that as there was violation, there should be maximum penalty. Such approach of respondent No. 2 is not correct. Exit of the goods is definitely a relevant and important consideration. Those who have not produced T. D. for endorsement and cannot prove that the goods were actually sent out, and those violators who can prove that the goods were actually sent out, cannot be equated for the purpose imposition of punishment. The revisional authority committed material irregularity in not considering such claim and in not recording a finding thereon.
11. Respondent No. 1 had not accepted the petitioner''s case because of two discrepancies mentioned in his order. He noted that vehicle No. given in the T. D. was different from that in the consignment note and challan and consignment note No. was not written on the T. D. Respondent No. 1 however failed to notice that the petitioner mentioned possibility of transshipment at its depot in Kolkata. He also missed that in the challan T. D. No. with date was mentioned. Challan contained the value of the goods and the value in the challan tallied with the value declared in the T. D. Besides the petitioner produced certificate and receipt issued by appropriate authorities of the receiving store of the petitioner-Coal India Ltd.
12. We have carefully perused the documents. Petitioner No. 1 is a Central Government undertaking. Receipts and certificates granted by the competent officials of the petitioner should not be brushed aside lightly. If all the documents are properly looked into and scrutinised it appears that if the petitioner offered appropriate explanation for the difference in vehicle No., it could be definitely held that the goods were sent out. But still all other documents suggest that the goods might have been sent out to its destination in Madhya Pradesh. The petitioner is a Central Government undertaking, it is very difficult and unusual for it to divert such valuable imported goods and to sell it in West Bengal surreptitiously.
13. As already mentioned hereinbefore, the petitioner committed similar infringements on earlier occasions and still it had not become careful. Previously token penalties were imposed but those could not bring desired result.
14. Taking a comprehensive look at all the relevant facts and circumstances of the present case we are of the view that penalty should be imposed but not at the maximum rate. Accordingly we modify the impugned penalty order and the revisional order confirming the penalty and reduce the penalty to Rs. 1,25,000 (rupees one lakh twenty five thousand only).
15. The application is disposed of. No order as to costs.
Dipak Chakraborti (Technical Member)
16. I agree.
