DEPUTY COMMISSIONER OF COMMERCIAL TAXES MADURAI DIVISION MADURAI Vs. KODAIKANAL MOTOR UNION PRIVATE LIMITED

JUDGEMENT

(1.) The respondents in all the four cases are the same and they were assessees under the Central Sales Tax Act, 1956. For the assessment years 1958-59 to 1961-62, it was found that they had purchased motor spare parts on the basis of the'c'form certificate issued to them under the provisions of the Central Sales Tax Act for sale, but instead of selling them, they used them for their own consumption. The revenue proceeded on the basis that since the goods purchased were not used for he purpose specified in section 8 (3) (b) and as recorded in the'c'form certificate, the assessee has committed an offence under section 10 (d) of the Act in that he has used the goods purchased by him on the basis of the 'c' form certificate for a purpose other than the one mentioned therein and, therefore, they are liable to penalty as well. All the authorities below, including the Tribunal, have found that the assessee has actually committed the offence under section 10 (d) in using the goods for a purpose other than the one mentioned in the'c'form certificate. Being a finding of fact, we have to accept the same and proceed on the basis that the assessees have committed the offence.

(2.) The question is what is the quantum of penalty that has to be levied under section 10-A of the Act. Section 10-A empowers the authority who is competent to grant the certificate of registration to impose a penalty in a sum not exceeding 1 1/2 times the tax which would have been levied under this Act in respect of the sale to him of the goods if the offence had not been committed. The Tribunal accepted the assessee's contention that the penalty leviable under section 10-A in this case should be 1 1/2 times the concessional rate of tax and not 1 1/2 times the tax which would have been leviable if no 'c' form certificate had been produced. In these tax cases, the revenue challenges the correctness of the view taken by the Tribunal. We find that the scope of section 10-A came up for consideration before a Division Bench of this court in State of Madras v. Prem Industrial Corporation In that case, veeraswami, C. J. , speaking for the Bench, has clearly laid down that the concluding words of section 10-A, "if the offence had not been committed" should govern the situation and that the penalty under that section should not exceed 1 1/2 times the tax which would have been levied under the Act in respect of the sale effected by the assessee if the offence had not been committed, and that any other view will be inconsistent with the express words of the statutory provision. The following observations appear to be pertinent : "the words 'if the offence had not been committed' clearly points to the result that the tax for purposes of assessing one and a half times thereof is not that which would have been levied on the basis that the'c'forms had not been complied with or have been misused, but, as if they have been used in a proper way. If that were not the case, there would be no meaning to the last words we have referred to."