SRI LAKSHMI MACHINE WORKS Vs. STATE OF MADRAS

JUDGEMENT

(1.) THIS is an appeal filed against the order of the Board of Revenue cancelling the order passed by the Appellate Assistant Commissioner and restoring the order of the assessing authority levying a penalty of Rs. 12,579 under section 10a of the Central Sales Tax Act. The assessees are manufacturers of textile machinery. They had imported asbestos sheets worth Rs. 96,756. 65 from outside the State and had issued C forms in respect of the said purchase of asbestos sheets. The assessing authority took the view that the registration certificate issued to the assessees by the registering authority constituted under that Act did not enable them to issue C form certificates in respect of asbestos sheets and that the issue of C form certificates by the assessees was under a misrepresentation that they are entitled to purchase asbestos sheets under the registration certificates issued to them. He, therefore, invoked the provisions of section 10a and levied the penalty holding that the assessees have committed an offence under section 10 (b) of the Act.

(2.) THERE was an appeal by the assessees to the Appellate Assistant Commissioner, who set aside the order holding that for an offence under section 10 (b) it should be clearly established that there was the necessary mens rea on the part of the assessees while giving the C form certificates and that on the materials on record it cannot be said that the assessees issued the C form certificates under a false representation. According to the Appellate Assistant Commissioner, the assessees were under the bona fide impression that asbestos sheets purchased and used for the erection of plant and equipment will come under the term "sheets" occurring in item 11 of column 16 (b) in the registration certificate issued to the assessees. Having found that mens rea on the part of the assessees has not been established, the Appellate Assistant Commissioner cancelled the order of penalty on the ground that an offence under section 10 (b) has not been made out.