J J CONFECTIONERY P LTD Vs. STO

JUDGEMENT

(1.) Petitioner is a registered dealer, engaged in manufacture of confectioneries. As job work, they attend to production on behalf of another unit, M/s. Parrys Confectionery Ltd., who is a registered dealer at Palakkad. Raw materials and consumables are supplied by the principals, and as a consequence, the petitioner had submitted 'nil' returns for past few years.

(2.) The petitioner was in need of C - Forms and highlighting the request, application had been filed, in prescribed form. This was not issued. But on 2nd November, 2000 Ext. P3 communication has been issued by the first respondent demanding the petitioner to furnish additional security of Rs. five lakhs, under S.7(3A) of the Central Sales Tax Act. It is stated that till 1993-94, they had collaboration with M/s. Parrys, that the sales tax exemption enjoyed had got exhausted during 1993-94 and the C Forms already in possession by them had been misused for interstate purchase. Penalty proceedings also were initiated and these circumstances justified demand for additional security amount. The objections of the petitioner were overruled and it is submitted that Ext. P5 proceedings were issued.

(3.) As there was 'nil' return, the petitioner submitted that the yardstick employed for calling of security was without any statutory backing. The petitioner had submitted that for the period from 1994-95 to 1999-2000, using C Forms the petitioner had purchased goods worth Rs. 62,75,637.14. When such interstate purchase is there, and there was 'nil' returns, according to the Department, evasion was prima facie to be inferred, and this is the reason for insisting on security, and there is no question of any harassment as alleged.