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2025 Supreme(Online)(Cal) 4014
CALCUTTA HIGH COURT
T.S. SIVAGNANAM, CJ, CHAITALI CHATTERJEE (DAS), J
Dalmia Cement (Bharat) Limited – Appellant
Versus
Joint Commissioner, Commercial Taxes, Raiganj Range (now known as Raiganj Zone), Bureau of Investigation, North Bengal & Ors. – Respondent
WP.TT 13 of 2025
For the Appellants/Petitioners: Mr. Parag Kothari
For the Respondents: Mr. T.M. Siddique, Sr. Adv., Ld. AGP, Mr. N. Chatterjee, Mr. Tanoy Chakraborty, Mr. Saptak Sanyal
The imposition of penalties requires proof of intent to evade tax; technical violations can warrant discretion in penalty assessment.
Headnote:(A) West Bengal Value Added Tax Act, 2003 - Section 77 - Constitutional Writ Jurisdiction - Petitioner challenged penalty imposed for wrong Way-bill generation - Statutory violation established but lack of intent to evade tax noted - Court emphasized discretion in setting penalties upholding a principle of demerit-based sanctioning. (Paras 8, 12, 14)
(B) Judicial Authority Discretion - The court emphasized the importance of discretion in penalty assessments, referencing established case law including Hindusthan Steel Ltd. and others where intent must be proven for penalties to apply. (Paras 8, 10, 11)
Facts of the case:
The petitioner sought to condone delay in filing an application before the tribunal, which ultimately led to a penalty of Rs. 45,01260.00 for failing to generate a Way-bill for stocked goods transported without statutory compliance.
Findings of Court:
The court adjusted the previously imposed penalty rate from 14.5% to 5%, acknowledging clerical errors without intent to evade tax on part of the appellant.
Issues: The main issues were about the gravity of statutory breaches versus the intent to evade tax, and the appropriate penalty reinstatement.
Ratio Decidendi: The court highlighted that mere technical violations do not warrant steep penalties unless intent to evade tax is proven, suggesting discretion should favor lower penalties in unintended omissions. (Paras 13, 14)
Result: Writ petition allowed and penalty reduced.
| Table of Content |
|---|
| 1. discussion on the writ petition and penalty reassessment. (Para 1 , 4) |
| 2. clarification of factual issues related to way-bill generation and its implications. (Para 6 , 12) |
| 3. citations of case law emphasizing intent in penalty imposition. (Para 8 , 10 , 11) |
| 4. usage of discretion in penalty application. (Para 13) |
| 5. final ruling and mandated reductions of penalty. (Para 14 , 15) |
Mr. Parag Kothari ….. for the petitioner Mr. T.M. Siddique, Sr. Adv., Ld. AGP Mr. N. Chatterjee Mr. Tanoy Chakraborty Mr. Saptak Sanyal ……….for the State (Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.)
1. This writ petition has been filed challenging the order passed by the West Bengal Taxation Tribunal dated 4th March, 2025 in an application filed in RN- 930 of 2013. The petitioner filed the said application before the learned tribunal seeking condonation of delay of 440 days in filing the application being CAN-51 of 2025, which was an application filed for recalling the order dated 1st December, 2023 by which the main application being RN-930 of 2013 was dismissed for default.
2. The learned tribunal was not inclined to exercise any discretion in favour of the petitioner on account of its conduct. Firstly, the earlier application was filed supported by an affidavit, sworn to by an advocate’s clerk, which the learned tribunal rightly did not accept.
3. The second application was filed seeking condonation of delay of 440 days in filing the application. Certain reasons were given by the petitioner, which did not find favour with the learned tribunal. Consequently, the application stood dismissed. Aggrieved by the same, the petitioner has preferred this writ petition.
4. We have elaborately heard Mr. Parag Kothari, learned advocate for the petitioner and Mr. Tanoy Chakraborty, learned advocate for the State. There can be no second opinion as regards the correctness of the order passed by the learned tribunal because if the facts and circumstances, which were placed before the tribunal were placed before this Court, in all probabilities, this Court also would have arrived at the same conclusion as that of the tribunal. But one issue, which persuades us to go into the merits of the matter is that the petitioner will be left remediless and it will be compelled to pay the entire penalty of Rs. 45,01260.00/- calculated @ 14.5% of the total value of 52956 bags of cement. Therefore, we are inclined to consider the correctness of the order passed by the Joint Commissioner, Commercial Taxes, Raiganj Range dated 16th July, 2013 by which the penalty was imposed.
5. It is made clear that this order shall not be treated as a precedent and it is passed considering the peculiar facts and circumstances of the case.
6. The facts, which are not in dispute are that cement was manufactured in the State of Jharkhand and stock transfer was effected to the godwn of the manufacturer in the State of West Bengal, for which transaction, the petitioner subsequently generated Form-F declaration, which satisfies the requisite condition for stock transfer, failing which goods were liable for payment of Central Sales Tax. Respondent/revenue cannot dispute this fact. Secondly, the reason for imposition of penalty, that too @ 14.5% is on the ground that Way- bill was not generated in Form-50A and goods were shifted from the railway station to the godown of the petitioner and this came to light only when the officers of the department inspected the godown on 7th May, 2013. The consignment, which was despatched from Jharkhand on 2nd May, 2013 arrived at Dalkhola Rake Point on 5th May, 2013.
7. It is an admitted fact that on the said date, no Way-bill was generated in Form-
50A. On information being received that a huge stock of cement was being shifted from the railway rake point, the officers of the respondent/department inspected the godown on 7th May, 2013. On the very same day, the petitioner had generated the Way-bill and it was placed before the authority. Thu
