SHIVANANDA ELECTRIC CO RAICHUR Vs. STATE OF MYSORE

JUDGEMENT

(1.) This is an appeal by a dealer under the Central Sales Tax Act, 1956, hereinafter called the Act, and it is directed against the order of the Commissioner of Commercial Taxes in Mysore made in Case No. S.M.R. 85 of 1970-71 dated 21st October, 1971, by which the order of the Deputy Commissioner of Commercial Taxes, Gulbarga Division, Bellary, dated 17th January, 1970, was revised and a penalty of Rs. 3,000 was imposed on the dealer under section 10A of the Act for contravention of section 10(d). During the assessment year 1963-64 the dealer had purchased electrical goods from outside the State by issuing C forms which are intended for purpose of resale only. Instead of reselling the goods, the dealer used the same in execution of works contract which they were not entitled to. The use of goods purchased on issue of C forms in contravention of section 10(d) attracts penalty under section 10A of the Act. Therefore, the Commercial Tax Officer issued a show cause notice proposing to impose penalty. The dealer did not offer any explanation showing reasonable excuse for not making use of the goods for the purpose of resale. Therefore, the Commercial Tax Officer imposed a penalty of Rs. 4,406. Against the said order, the dealer preferred an appeal before the Deputy Commissioner of Commercial Taxes, Gulbarga Division. Before the Deputy Commissioner of Commercial Taxes, the dealer appears to have urged that the department had not proved mens rea which is required to be proved before levying penalty and, therefore, the levy was illegal. The Deputy Commissioner purporting to follow the decision of this court in State of Mysore v. S. S. Umandi ([1969] 24 S.T.C. 11; 1969 Kar. L.J. 25.), allowed the appeal and set aside the order of the Commercial Tax Officer.

(2.) The Commissioner of Commercial Taxes in exercise of the powers under section 22A of the Mysore Sales Tax Act, 1957, issued notice to the dealer and after hearing the dealer's Advocate, made an order dated 21st October, 1971, by which the order of the Deputy Commissioner was set aside and a penalty of Rs. 3,000 was imposed.

(3.) The relevant portion of section 10 reads thus :