ELCOME TECHNOLOGIES PVT. LTD. Vs. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, BUREAU OF INVESTIGATION AND ORS.

JUDGEMENT

(1.) IN this case the Petitioner is a company under the Companies Act, 1956 and also a dealer in reselling measuring machines and registered under both the Central and State Acts. In January 2008 the petitioner -company imported some goods as aforesaid in West Bengal from Gurgaon, Haryana. In February 2008 the Sales Tax Officer visited the place of business of the petitioner -company at Salt Lake and seized some of the imported goods for want of endorsed way -bill and subsequently the Assistant Commissioner of Commercial Taxes, Bureau of Investigation, initiated penalty proceedings for such import in contravention of Section 73 and imposed penalty thereon at 50 per cent treating the seized goods taxable at 12.5 per cent. Being aggrieved the petitioner -company preferred revision before the Deputy Commissioner of Commercial Taxes, Bureau of Investigation, who slightly modified the order of penalty passed only on the point of quantum thereof. In second revision before the Additional Commissioner of Commercial Taxes the first revisional order was further modified as to the value determined but the rate of penalty was confirmed by an order dated September 15, 2009 and being aggrieved the present application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 has been filed challenging the legality and validity of the order of penalty disputing only the rate of the penalty imposed and accordingly the quantum thereof on the grounds stated therein.

(2.) IT is contended in the application and submitted by Mr. D. Gangopadhyay that here in this case the Petitioner has challenged not the legality and validity of the seizure of the goods and/or the order of imposition of penalty in toto but the rate of tax exigible to the seized goods and the rate at which the quantum of penalty imposed thereon. It is further contended and submitted that the Respondents all along have wrongly treated the seized goods as not the machinery and taxable at four per cent but a different commercial article being not covered in item Nos. (i) to (xxvii) of serial No. 54B of the Schedule C, Part I of the West Bengal Value Added Tax Act, 2003 and taxable at 12.5 per cent and that is under challenge here in this case. It is contended and submitted further that the seized goods, i.e., measuring machines are also known as survey machines and are always used by the purchasers of the goods as tools to carry out their manufacturing process and, therefore, those are plants of their businesses as per serial No. 54B of the Schedule C, Part I of the Act and, therefore, taxable at four per cent only but the Respondents have failed to appreciate the real nature of the goods seized and have treated the goods as other than plant, and not mentioned in serial No. 54B of the VAT Act and, therefore, taxable at 12.5 per cent and for that has imposed penalty at 50 per cent on the assessed/determined value of the goods and here lies the illegality and, therefore, the orders impugned are liable to be set aside. It is also the contention of the petitioner -company and submission of its learned lawyer that on consideration of the functional aspects of the goods seized in the activities of the manufacturing process of the purchasing dealers, the goods should have been considered as tools in the trade of the purchasing manufacturers and, therefore, a plant of their business though not the machinery thereof and, therefore, taxable at four per cent as per serial No. 54B of the Schedule C, Part I and penalty should have been imposed at the maximum rate of 30 per cent and not at 50 per cent as imposed. It is also the submission of Mr. Gangopadhyay that plant does not always means any apparatus used for mechanical operations but it may also be a tool of the trade and/or even the intangible thing like ideas, plans, drawings, charts or designs contained in design books and in view of that the orders impugned suffer from illegality and/or material irregularity and, therefore, are liable to be set aside or at least to be modified to the extent as claimed above.

(3.) WE have gone through the contents of the application and the documents annexed thereto. We have scrutinized the impugned orders (annexure B), i.e., the order dated April 18, 2008, passed by the Assistant Commissioner of Commercial Taxes, Bureau of Investigation (Respondent No. 3), imposing penalty on the goods seized, the rate of which has been challenged in the application, and also the annexures C and D, i.e., the first revisional order dated October 20, 2008 passed by the Deputy Commissioner of Commercial Taxes, Bureau of Investigation (Respondent No. 2), in modification of the order passed by Respondent No. 1 as to the quantum of penalty imposed on the Petitioner and also the second revisional order dated September 15, 2009 passed by the Additional Commissioner of Commercial Taxes and Special Officer, Bureau of Investigation (Respondent No. 1) in further modification of the order passed by Respondent No. 2. At the very outset it will be worth noted that in all the orders right from imposition of penalty to the second revisional order thereon the rate of imposition of penalty at 50 per cent of the assessed/determined value of the goods seized treating the rate of tax thereon at 12.5 per cent has consistently been maintained and that is the moot question for determination here in this application.