MADANLAL AGENCIES LTD Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) THIS application was filed under Article 226 of the Constitution of India, being Matter No. 717 of 1988 of the Original Side of the High Court at Calcutta, and was numbered as RN -278(T) of 1989, upon transfer to this Tribunal under Section 15 of the West Bengal Taxation Tribunal Act, 1987.

(2.) THE applicant -company's case is that it is a commission agent of Mukand Iron & Steel Works of Bombay and is a registered dealer in iron and stainless steel items under the Bengal Finance (Sales Tax) Act, 1941 and the Central Sales Tax Act, 1956 (hereinafter referred to as "the 1941 Act" and "the 1956 Act"). The company imports goods into West Bengal from outside the State. The impugned consignment of stainless steel wire rods was being transported into West Bengal from Mukand Iron & Steel Works Ltd., Bombay, through Interways Transports. Upon receiving information that the consignment was being despatched, an application for issue of permit was filed on February 5, 1988, under Rule 93(1) of the Rules under the 1941 Act. The authorities asked the applicant to produce documents on February 8, 1988, for consideration of grant of the permit, February 7, 1988, was a Sunday. On February 8, 1988, the permit was issued. Meanwhile information was received that lorry No. OAU 2903 carrying the impugned goods had been detained at Chichira check -post, in the district of Midnapore for failure to produce a permit. On February 8, 1988, applicant's representative rushed to the check -post, produced the permit and requested the check -post officer in vain for release of the goods. The detention and seizure are challenged as illegal, arbitrary and tainted by malice. The basic requirement of Section 4B of the 1941 Act was fulfilled by production of the permit. The detention of the goods has allegedly violated the rights of the applicant under Articles 19(1)(g) and 14 of the Constitution, resulting in unnecessary harassment.

(3.) THE case of the respondents is that the applicant had applied for issue of a permit in form XXX -B which is generally issued to certain dealers as a special facility in respect of future imports of notified goods for use, after filling in the blank columns therein. On February 6, 1988, at 5.50 a.m. the impugned truck carrying 42 coils of stainless steel wire rods was intercepted when it was entering the State of West Bengal from outside. The driver having failed to produce the necessary permit on demand, the goods being notified goods were seized. A permit obtained after a seizure is complete, is said to be of no use. The respondents have largely relied on Rule 93 of the Rules under the 1941 Act in this connection. The seizure is claimed to be valid, the import being in violation of Section 4B of the 1941 Act. The notice under Memo No. 8726 dated February 10, 1988, was issued to the applicant for showing cause against imposition of penalty under Section 14A(2) fixing March 11, for hearing. But in terms of the High Court's order dated February 18, the hearing was taken up on February 19, 1988. Value of the seized goods was determined at Rs. 3,27,216 and penalty was imposed at Rs. 81,804. Hence, the second notice vide Memo No. 8924 dated February 19, 1988, was a demand notice for the penalty. The notices are said to be valid. The applicant, it is contended, ought to have availed of the remedies available under the 1941 Act and ought to have preferred appeal against the penalty order.