RAJALAKSHMI TEXTILES FINISHING MILLS Vs. STO, CANNANORE

JUDGEMENT

(1.) The second petitioner got himself registered as a dealer under S.7 of the Central Sales Tax Act, 1956 in his capacity as managing partner of a firm, the first respondent. Ex. P2 dated 31-7-1965 is a copy of the certificate of Registration issued to him by the respondent, the Sales Tax Officer, Cannanore. Pursuant to that certificate, the firm purchased a large quantity of machinery and machinery parts for establishing a plant for calendering under 'C' Forms issued by him. The respondent considered that the above purchases were not covered by the certificate of registration, and the first respondent had thereby committed offences under Clauses (b) and (d) of S.10 of the Act. He, therefore, issued a notice, Ex. P3 dated 3-8-1966, to the first 3 respondent calling upon it to show cause why a penalty of one and a half times the tax which would have been levied under the Act in respect of those purchases should not be imposed on him under S.10A of the Act. The first petitioner filed O. P. No. 3139 of 1966 in this Court to quash the above notice. This Court dismissed that petition stating that it was then premature to move this Court under Art.226 of the Constitution. The respondent again issued a notice, Ex. P4 dated 22-1-1970, more or less in the same terms as Ex. P3. The first petitioner submitted a detailed explanation, Ex. P5 dated 12-2-1970. The respondent rejected the explanation and passed an order Ex. P6 dated 23-3-1970 holding that the first petitioner was guilty of the offences under Clauses (b) and (d) of S.10, and imposing on it a penalty of Rs. 47,433-66 which is equal to one and a half times the tax which would have been levied in respect of the goods purchased by the first respondent if those purchases were not covered by 'C' forms. The writ petition has been filed to quash the above order.

(2.) The first point raised by the petitioner is that the purchases were covered by the certificate of registration. The goods that would be covered by the certificate of registration are goods of the description referred to in S.8(3)(b) of the Act. They are only goods intended for resale, or for the use by him in the manufacture or processing of goods for sale etc. The goods purchased by the first petitioner were admittedly for constructing a plant for manufacture of goods; and according to the petitioner the said goods would be covered by the certificate of registration. I am unable to accept this contention. Goods purchased for erection of a plant are not obviously "goods for use in the manufacture or processing of goods for sale". The purchases would not, therefore, be covered by the certificate of registration.

(3.) The second point raised by the petitioners is that even assuming that the purchases are not covered by the certificate of registration, the petitioners have not committed any offence under Clause (b) or (d) of S.10 of the Act. It is necessary to read the above provision.