HC Set Aside Order of Detention of JCB Machine as Owner of Had No Intention to Evade Tax

Case Details: Mohammad Shamasher v. State of West Bengal - [2024] 159 taxmann.com 192 (Calcutta)

Judiciary and Counsel Details

• • Amrita Sinha, J.
  • Dhiraj Lakhotia & Ms Khushi Kundu, Advs. for the Petitioner.
  • Momenur Rahman & Ms Rima Sarkar, Advs. for the Respondent.

Facts of the Case

In the present case, the escalator machine (JCB) of petitioner which was returning from work was intercepted and driver failed to produce documents in support of movement of JCB machine. Thereafter, the detention order under section 129 (1) was issued and penalty at rate of 200% was imposed. It filed writ petition and contended that that there was tax evasion since no tax was payable on account of the return of the machine after completion of work.

High Court Held

The Honorable High Court noted that it was a non-taxable movement of goods as machine was returning after completion of work. Despite non-taxable nature, the revenue imposed a penalty due to lack of valid documents supporting goods’ movement.

The Court also observed that every detention may not invariably be proceeded under Section 129 and if fraudulent intent is not found, Section 129 may not be invoked. Thus, the Court held that even though possession of all document in support of transportation is fundamental requirement of law, assessee did not have intention to evade tax, and accordingly, imposition of penalty at rate of 200% of tax payable appeared to be highly disproportionate and liable to be set aside.