1. This application under article 226 of the Constitution of India is at the instance of a dealer within the meaning of the West Bengal Value Added Tax Act, 2003 and is directed against an order dated December 5, 2008 (Hasmukh Parekh v. Assistant Sales Tax Officer) passed by the West Bengal Taxation Tribunal by which the said Tribunal affirmed the order of seizure of 1313.360 grams of gold ornaments u/s 76 of the West Bengal Value Added Tax Act, 2003 and the imposition of penalty of Rs. 5,06,674 u/s 77 of the said Act. The facts gives rise to filing of this writ application are as follows:
On April 15, 2008 at 18 hours, the writ petitioner''s representative produced an air-way bill for the imported "gold" before the Assistant Sales Tax Officer, Central Section, N.S.C. Bose International Airport Check-post. The air-way bill did not indicate whether the contents were gold bar or gold ornaments. The writ petitioner''s representative, on being asked for, produced the said packets. On physical verification 5,000 grams gold bar and 1313.360 gm. gold ornaments were found inside the packets. The carrier could not produce the way-bill and invoice for the gold ornaments and on that ground, the gold ornaments were seized.
2. Subsequently, a penalty proceeding was initiated and the penalty was awarded valuing the gold ornaments at Rs. 16,88,981 for the reasons that (i) there were misdeclaration of the contents of the consignment and (ii) non-production of way-bill and invoice for the gold ornaments.
3. The matter ultimately came up before the learned Tribunal for setting aside the order of seizure and imposition of penalty and as indicated earlier, the learned Tribunal by the order impugned herein has affirmed the order of seizure and imposition of penalty.
4. Being dissatisfied, the dealer has come up with the present writ application.
5. The only question that falls for determination in this application under article 226 of the Constitution of India is whether the writ petitioner is guilty of violation of sub-rule (1) of rule 100 of the West Bengal Value Added Tax Rules, 2005, which is the reason for seizure of the gold ornaments and imposition of penalty.
6. In order to appreciate the aforesaid question, it will be appropriate to refer to the provision contained in rule 99 of the West Bengal Value Added Tax Rules, 2005, which is quoted below:
99. Restriction on transport of my consignment of goods despatched from any place outside West Bengal.--(1) No dealer, casual dealer, or any other person shall, except in the manner are prescribed in rule laid down in this Part or Part II of this Chapter, transport any consignment of goods except the consignment of goods of the nature or value specified in sub-rule (2) despatched from any place outside West Bengal from any railway station, steamer station, port or airport in West Bengal or across or beyond the notified area of a check-post or any other place.
Explanation.--For the purpose of sub-rule (1), ''goods'' shall mean goods other than those goods sales of which are tax-free u/s 21, but including raw jute, purchases of which are liable to tax u/s 11.
(2) The provisions of rule 100, rule 101 or rule 102 shall not apply to a consignment of goods--
(a) where such consignment of goods being transported by any person or on his account is his personal effects; or
(b) where such consignment of goods is of tea being transported by any banking company as defined in the Banking Regulation Act, 1949 (10 of 1949) or on account of such banking company; or
(c) where such consignment of goods is of--
(i) printed materials including diary, calendar, brochure, leaflet or pamphlet not meant for sale;
(ii) gold, or precious stones including pearls (real, artificial or cultured);
(iii) pure silk cloth made in India;
(iv) radioisotope or radio-pharmaceutical item;
(v) exposed cinematographic film; and
(vi) cotton yarn;
(d) where such consignments of goods is consigned by defence group under the Ministry of Defence, Government of India;
(e) where such consignment of goods is for bond to bond transfer by customs group where the goods are moved under seal of Customs Department subject to the submission of declaration in duplicate, for counter-signature by check-post authority at the time of entry of the goods, in the following format:--
Declaration
Original/Duplicate
(See clause (e) of sub-rule (2) of rule 99)
No. ...
Date....
In accordance with the provision of clause (e) of sub-rule (2) of rule 99 of the West Bengal Value Added Tax Rules, 2005. I/We hereby declare that the following consignment of goods is to be imported into West Bengal through...(the name of the check-post) check-post for despatch to...(name of the place outside West Bengal) otherwise than by way of sale or delivery in West Bengal
(a) Description of goods:
(b) Quantity:
(c) Value:
(d) Name and address of the consignor:
(e) Consignor''s invoice No. and date:
(f) Bill of lading or air note No. and date:
(g) Place from which the goods are despatched:
I/We hereby declare that I/We am/are a dealer/not a dealer under the West Bengal Value Added Tax Act, 2003 and the information and the statement given herein are true to the best of my/our knowledge.
I/We also undertake immediately to pay tax in the event of any sale of such goods in West Bengal.
Date:
Name of the declarant....
Signature of the declarant....
Place:
Status of the declarant....
Counter-signature by Customs
Authority with seal.
7. On a plain reading of the aforesaid rule, it indicates that sub-rule (2) thereof specifically bars the application of the provisions of rules 100, 101 and 102 in case of the consignment of goods, indicated under sub-rule (a) to sub-rule (e).
8. According to sub-rule (c)(ii) where such consignment of goods is of gold, or precious stones including pearls (real, artificial or cultured), rule 100 will have no application.
9. All the authorities below including the learned Tribunal were of the view that the word "gold" should mean the gold bar and not the gold ornaments and for that reason, the authorities below rightly released the gold bar, but seized the gold ornaments and imposed penalty.
10. After hearing the learned counsel appearing for the parties and after going through the aforesaid provisions, we find that according to sub-rule (2)(c), if the consignment of goods is of gold, in such a case, rules 100 to 102 should not apply.
11. Therefore, the gold ornaments, which are made of gold, definitely come within the purview of sub-rule (2)(c)(ii). We are unable to accept the contention of Mrs. Roy, learned advocate appearing on behalf of the respondents, that the word "gold" used should be treated to be the gold bar, as, according to her, the gold means the gold bar. Since sub-rule (2) speaks of the consignment as goods "of", the aforesaid interpretation is not tenable in the eye of law.
12. Apart from the aforesaid fact, we have also checked up the Schedule B of the West Bengal Value Added Tax Act, 2003, wherein both the gold bar and the gold ornaments are taxable at the same rate of one percent.
13. Thus, there is no justification of bringing the gold ornaments out of the purview of rule 99(2)(c)(ii), when the gold ornaments is a consignment "of" gold.
14. We, thus, find that the authorities below acted illegally in seizing the gold ornaments and imposing the penalty for violation of rule 100, when rule 100 does not apply to any consignment of gold, which includes the gold ornaments.
15. We, thus, set aside the order passed by the learned Tribunal and direct to refund the security obtained by the respondent-authority for release of the gold ornaments. We are told that a total amount of Rs. 1,00,000 has been paid as a security for release of the ornament. The respondent is directed to release the amount positively within one month from today.
16. The writ application is, thus, allowed to the extent indicated above. In the facts and circumstances, there will, however, no order as to costs.
