Judgment:
1. In this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicant has challenged the seizure of goods under Section 70 and imposition of penalty under Section 71 of the West Bengal Sales Tax Act, 1994 (in short, "'the 1994 Act") at the Chichira check-post, Midnapore. Applicant No. 1 is a dealer registered under the 1994 Act and his business concerns dry fruits. His case is that a consignment of 451 bags of "wet dates" was despatched to him from Mumbai by road through M/s. North Eastern Carrying Corporation in vehicle No. MP23 DA 1954 which reached Chichira check-post on January 24, 1997 and was intercepted at 8 A.M. "Wet dates" being goods specified in Part A of Schedule-IV, permit in form 41 bearing No.1442/96-97 was taken on January 21, 1997 and was given to the transporter who on the next day sent it to their clearing agent Mr.
Roshanlal Goel at Dharisol which is three (3) kilometers from the check-post. The transporter had instructed the driver, as usual, in writing to contact Mr. Goel before going to the check-post.
2. The driver by mistake did not contact Mr. Goel but came directly to the check-post where the goods were intercepted at 8 A.M. and seized the same day at 10.30 A.M. A penalty proceeding was immediately started, notice of hearing in form 44 was issued on the same day, and the next day after hearing a penalty of Rs. 1,22,500 was imposed, even though the permit was produced at the time of hearing. Notice of demand in form 45 addressed to the applicant at Calcutta was given to the driver the same day.
3. The respondents dispute this version of the events. According to them the driver, when asked by the patrolmen on duty at the check-post gate, refused to produce any documents and forcefully tried to drive away. The patrolmen on gate duty chased and stopped the vehicle. That is how the interception took place. The driver then produced some papers which did not include the permit in form 41.
4. Mr. S.N. Bose, Advocate appearing for the applicant argues that there could arise no question of driving away from the check-post gate because the check-post drop gate always remains in closed position and is not lifted unless so directed by the Inspector of Commercial Taxes on duty. The officers at the check-post should have noticed, according to him, that the papers produced by the driver indicated that the driver should have met Mr. Roshanlal Goel before coming to the check-post and, on the basis of this, should have come to the conclusion that the driver came to the check-post without the permit by mistake. He submits that the seizure is bad in law because forty eight hours' time was not given after detention, or even interception. He contends that since the sales tax permit was produced at the time of hearing of penalty proceeding, Section 71 of the 1994 Act should not have been invoked. He further states that, in view of the applicant's submissions made with reference to the supporting documents including the permit, the imposition of the huge amount of penalty violates the principle of natural justice and should be set aside.
5. Mr. M.C. Mukhopadhyay, learned State Representative appearing for the respondents, explains that on the National Highway the flow of incoming and outgoing vehicles is such that it is not practicable to drop and lift the gates every time a vehicle passes. The practice, therefore, is that the gate remains open in lifted position all the time and the speed breaker, which is specially installed on the road, slows the vehicle down and helps the patrolmen in their duty. The driver of the vehicle in which the goods of the applicant were being carried in the morning of the January 24, 1997 actually refused to produce the papers and tried to drive away. This is explicitly mentioned in the seizure list. The seizure list carries the signature of the two patrolmen on duty who chased and stopped the vehicle. The order in the penalty proceeding, drawn up the next day, specifically mentioned the effort to escape. The fact that the driver tried to drive away and had to be chased and stopped was adequate reason for the Inspector to believe that the goods were being transported in contravention of Rules. Mr. Mukhopadhyay further submits that the transporter's instructions to the driver as printed on the body of the challan wanted him to contact the clearing agent only for checking papers, and never indicated the need to ask for permit in form 41 ; his attempt to drive away negatives the suggestion that he came to the check-post without the permit by mistake. Moreover, there was no point giving him much time to produce the permit because he did not want to produce it as proved by the fact that he did not contact the clearing agent before he came to the check-post, nor did, ask for time for that purpose. The place where the seizure took place is not a closed place and there is no dispute about the goods seized and hence the absence of independent witnesses, other than the two patrolmen on duty, does not invalidate the seizure. Mr. Mukhopadhyay submits that producing the permit in form 41 at the time of hearing of penalty proceeding is not adequate compliance of the law. The permit is to be produced, as per Rule 212(4) of the West Bengal Sales Tax Rules, 1995, before an officer of the check-post who will only then allow the movement. The Rule does not envisage a production twenty four hours after a driver attempts to forcefully drive away from the check-post without having the permit with him. If a vehicle is successful in getting away and is later intercepted somewhere on its way to Calcutta, production of the permit will not be sufficient unless it has been endorsed duly under the said Rule at the time the goods crossed the check-post. It is the contention of the respondents that the circumstances of interception are such and the intention of evasion is so clear that the maximum penalty is called for. The quantum of penalty imposed is therefore neither arbitrary nor unjust.
6. From the submissions of the sides it appears that on the factual aspects the sides are not in dispute except on two issues, the first of which is whether the driver was trying to drive away forcefully from the check-post with the vehicle. The applicant has all along contended that it is not possible to flee with a vehicle without breaking the check-post barrier or trampling the patrolmen. On this ground he refuses to admit the charge of attempt to flee. The explanations given by the respondents in their affidavit-in-opposition and by the Advocate during the hearing make it clear that such an attempt can be made because the check-post gate is usually kept in an open position to allow heavy traffic both ways. This explanation was not controverted adequately in the reply and it is therefore held that there is no ground to disbelieve the fact mentioned in the seizure list that the driver tried to forcefully drive away when he was chased and was stopped by the patrolmen on duty. Moreover, in the absence of any allegation or proof of animosity between the employees manning the check-post and the truck driver, there is no reason to disbelieve the record made in the regular course of official business.
7. The applicant has questioned the legality of the seizure on the ground that adequate time was not given for producing required documents, while Section 70 of the 1994 Act specifically provides for detention before seizure for a period not exceeding forty eight (48) hours. While the vehicle was intercepted at 8 A.M. on January 24, 1997 the seizure took place at 10.30 A.M. The petitioner contends that if reasonable time had been allowed, the driver could have brought the sales tax permit from Shri Roshanlal Goel and produced it. The respondents have stated in the affidavit-in-opposition that the driver had not asked for time for production of the permit and, therefore, the question of granting it did not arise. In our view, the attempt of the driver to forcefully drive away proves that he never intended to produce the permit, and, therefore, giving time unwanted was not necessary. Moreover, as is claimed, the permit was lying with Mr. Goel only three kilometer away and the driver could have produced it within the time that he actually got. In view of this position and in view of the fact that Section 70 indicates only the upper limit of the period of detention before seizure and does not lay down a statutory lower limit--the lower limit would thus depend on the circumstances of each individual case--we cannot accept the applicant's submission that the seizure is illegal on this ground.
8. The decision of this Tribunal in the case of Hindusthan Lever Ltd. reported in [1990] 76 STC 155, was relied on by the applicant. In this case the consignments were being carried by new transporters and the drivers being unaware of the system of operation, reached the check-post without contacting the applicants' agents and, therefore, without having the permits with them. The goods were seized and, after hearing, value was determined and penalty was levied. The Tribunal held that the opportunity of being heard, before imposition of penalty, must not be confined to the question of valuation and quantum of penalty alone, but should include an opportunity to explain the reasons for failure to furnish the relevant documents at the moment it was demanded. The applicant thinks that his case is similar to the case of Hindusthan Lever Ltd. [1990] 76 STC 155 (WBTT) and argues that since he produced the permit at the time of hearing, and explained non-production at the time of entering the check-post as due to a driver's mistake, no penalty should be levied in his case. But we have already come to the conclusion that the driver's action cannot be categorised as a mistake, and hence hold that there is no applicability to the present case of the decision of the Tribunal in the case of Hindusthan Lever Ltd. [1990] 76 STC 155.
9. The applicant has also relied upon the judgment of the Karnataka High Court in the case of Mahaveer Fancy Stores reported in [1993] 89 STC 524. In this case two consignments carried in goods vehicles were stopped at a check-post near Bangalore when some relevant prescribed documents were not produced. According to the appellant, who was the owner of the consignments, these documents had been given to some other goods vehicle by mistake. At the time of hearing in the penalty proceedings the appellant produced those documents which he had recovered in the mean time. But the authorities did not consider any of the explanations and imposed penalty. The High Court held that there should be something more apart from the delayed production of the documents to doubt the bona fides of the trader. The applicant in the present case before us submits that, on the analogy of that case, the assessing officer should not have doubted his bona fides and therefore should not have imposed penalty. But in the present case there was something more apart from the delayed production of the documents, namely, the effort of the driver to forcefully drive away from the check-post. Therefore, we hold that the decision of the Karnataka High Court in the above mentioned case does not support the petitioner's contention.
10. The other ground on which the applicant challenges the legality of the seizure is the absence of independent witnesses. He submits that this is against the provisions of Rule 207 of the 1995 Rules. The seizure took place on the road beyond the check-post gates in the open and before the glare of anybody who happens to be present and therefore Sub-sections (4) and (5) of Section 100 of the Criminal Procedure Code cannot apply here. This Tribunal has observed in the case of Ajanta Organisation v. Commissioner of Commercial Taxes (RN-116 of 1995, [1997] 107 STC 242) and reiterated in case of Mogan Ramji Bajoria v.Commissioner of Commercial Taxes (RN-113 of 1995) as well as in Md.
Masroor v. C.T.O., Central section (RN-102 of 1994) that though Section 100(4) and (5) relate to searches and seizures at "places", Section 100(1) of the Criminal Procedure Code deals with "a place" which is closed and besides, Sub-section (6) of Section 100 amply makes it clear that sub-sections (4) and (5) of Section 100 can hardly apply to seizures on roads or in the open in so far as it stipulates that the occupant of the "place" searched shall be permitted to attend the search and a copy of the seizure list should be delivered to him.
Accordingly, we hold that the seizure from the truck cannot be said to have been vitiated by the lack of independent witnesses.
11. The applicant has challenged the propriety of imposition of penalty on the ground that the applicant had no intention to evade the tax, and the driver came to the check-post without the permit by mistake. He further submits, in para 20 of the application that "the infraction as noticed by the respondents will appear to have been adequately made good by causing production of the relevant permit not only soon after the seizure but also before imposition of penalty". But we must remember that when the patrolmen on duty asked the driver to produce documents, the driver did not produce anything and tried to forcefully drive away. This is not the demeanour of a man who has made a mistake.
Rather, it is the action of a man who desperately attempts to escape the consequences of his act, of the illegality of which he is perfectly aware, namely, the transportation of Schedule IV goods without permit.
We, therefore, cannot accept that the driver came to the check-post without the permit by mistake.
Sections 68, 69, 70 and 71 aim, among other things, to stop evasion of payment of tax. Penalty is imposed to discourage evasion. Attempt to evade may take many forms. While taking action under these sections the authorities have to keep in mind the various ways in which such attempt can be made. One such way the Deputy Commissioner, Commercial Taxes has mentioned in his order of revision. A dealer, though he wants to evade tax, procures a permit but instructs the driver not to produce the permit and try to forcefully pass the check-post gate. If he is caught, then he will take the plea of having procured the permit beforehand and not producing it by mistake. If he is successful in his attempt, he will surrender the permit on the plea of non-importation of the consignment. Without going into the question whether or not the applicant and the driver were trying to follow this method of evasion, it will be adequate to say that when a vehicle has crossed a check-post gate, forcefully or otherwise, subsequent production of permit in form 41 will be a good defence if, and only if, the permit has already been endorsed in terms of Sub-rule (4) of Rule 212 of the West Bengal Sales Tax Rules, 1995. Production of a permit which is not endorsed in this manner does not ipso facto establish the bona fides of the import, nor does it justify the importer's claim for non-imposition of penalty. The second dispute regarding facts relates to the saleable value of the consignment. The consignment comprised of "wet dates" of net weight 11,880 kilograms packed in 451 bags. While applying for the permit the applicant had indicated that its saleable value is approximately 1,69,000 rupees. In other words its saleable value was a little more than Rs. 14 per kilogram. The officer imposing the penalty disbelieved this value and according to his best judgment determined the value to be Rs. 4,90,000. In other words, according to him, the saleable value was a little more than Rs. 41 per kilogram. Applicant contends that the C.T.O. while imposing the penalty erred in not accepting the saleable value given in the application in form 40 on the basis of which permit was granted after verification of all documents. But Section 71 specifically mentions the maximum penalty to be 25 per cent of the value of goods as may be "determined by him". The applicant alleges that the value determined by him is arbitrary. The C.T.O. does not say anything specific about the basis of this valuation except that it is according to his best judgment. No doubt, an estimation by best judgment may take into account an element of guess-work, but it is nevertheless a "judgment" and hence must have some basis. It cannot be without any basis at all. So, the value determined by the C.T.O. cannot be accepted.
12. That being the position, the saleable value declared by the applicant has to be accepted.
13. The facts and circumstances of the case justify imposition of the maximum amount of penalty, i.e., 25 per cent of the value. Hence, the penalty must be, and is hereby reduced to Rs. 42,250.
14. Thus, the application is allowed in part. The sum of Rs. 42,250 deposited under interim order of this Tribunal shall be adjusted against the quantum of penalty (Rs. 42,250) determined by us.