LAWS(MAD)-1991-10-51

S N GURUMURTHY Vs. STATE OF TAMIL NADU

Decided On October 01, 1991
S. N. GURUMURTHY AND SONS Appellant
V/S
STATE OF TAMIL NADU Respondents

JUDGEMENT

(1.) THE appellants are the dealers in stainless steel wares at Mayuram. THEy are registered under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act"). THEy were issued declarations in form "C" to purchase articles from outside the State. On the basis of the entries in the registration certificate, the assessees purchased plastic goods from other States by issue of "C" forms and availed of the concessional rate of tax. THE plastic goods purchased were for value of Rs. 7, 907. 06. THE registration certificate, as amended, permitted the use of "C" form for purchase of plastic goods "for resale". THE assessing authority, on the basis of the accounts, found during the assessment proceedings that the plastic goods purchased by the assessees were not "resold" but given away as complimentary to the customers who purchased brass ware and aluminium ware or stainless steel ware from the assessees. Construing this to be a violation of section 10(d) of the Act, the assessing authority levied penalty under section10A of the Act. THE assessees went up in appeal before the Appellate Assistant Commissioner. THE Appellate Assistant Commissioner, however, opined that the value of the plastic goods was included in the value of the articles sold by the assessees and that sales tax had also been remitted on the price of plastic goods and, therefore, there was no misuse of the "C" form as the plastic goods had been "resold". THE Joint Commissioner, however, was not satisfied and in exercise of the suo motu powers of revision under section34 of the Tamil Nadu General Sales Tax Act, proposed to set aside the order of the Appellate Assistant Commissioner and restore that of the assessing authority. Notice was issued to the assessees calling upon them to file objections. After receiving the objections and hearing the parties, the Joint Commissioner by the order dated August 16, 1982, impugned in this appeal, set aside the order of the Appellate Assistant Commissioner and restored the penalty levied by the assessing authority.

(2.) MR. N. Inbarajan, learned counsel for the appellants, submitted that there has been no misuse of form "C" and that the plastic articles purchased by the assessees by use of "C" forms and on payment of concessional rate of tax were distributed along with the articles sold by the assessees to their customers and, therefore, the imposition of penalty for alleged violation of section10(d) of the Act was not called for, We cannot agree.

(3.) THE Appellate Assistant Commissioner fell totally in error in holding that the plastic goods had been resold and drawing upon his imagination to hold that sales tax had been paid on the resold plastic goods when it is not even the case of the assessees at any stage that sales tax had been paid on the resale of plastic goods. THE non-payment of sales tax on the supply of the plastic goods would reinforce the finding of the assessing authority and the Joint Commissioner that the plastic goods were actually not resold but given away as complimentary, which was the first stand taken by the assessees before the statutory authorities. THE records do not show that when the other wares were sold by the assessees to the customers any price of the plastic container was realised from them and sales tax charged from them. THEre is no record even otherwise to show that for the plastic goods resold, any sales tax was remitted to the authorities under the Act. THE absence of levy and remission of sales tax on the alleged resale of the plastic goods would give rise to an inference that there was no resale of the plastic goods and the Joint Commissioner rightly founds that the plastic goods were given away free. THE assessees failed to adduce any reasonable excuse for use of the goods for purposes other than for "resale" either before the Joint Commissioner or even before us. Since the condition that the goods must be used for the specific purpose permitted in the registration certificate was violated by the assessees and no reasonable excuse or explanation was furnished for the same, the Joint Commissioner was fully justified in holding that the assessees had violated section10(d) of the Act and were liable to suffer penal consequences envisaged under section10A of the Act. THE order of the Joint Commissioner under the circumstances, does not require any interference at our hands. Consequently we find no merit in this appeal. THE same is hereby dismissed, but without any order as to costs.