STATE OF TAMIL NADU Vs. GEMINI STUDIOS

JUDGEMENT

(1.) THIS revision petitioner is filed against the order of the Tribunal setting aside the penalty levied under s. 10 (b) r/w s. 10a of the central ST Act, 1956. the respondents are dealers registered under the Central st Act. They are film producers and processors of cinema films. They purchased an Otis lift for Rs. 20630/- on 30th September, 1960 by issuing'c'forms. On the ground that the registration certificate issued under the Central ST Act did not authorise the purchase of Otis lift by issue of'c'forms, the Joint commercial Tax Officer, T. Nagar Division, initiated proceedings under s. 10 (b)r/w s. 10a of the Act. The respondents replied by their latter dt. 9th May, 1967 that Otis lift purchased by them would come either within the class or articles mentioned in category (b) of the Certificate of registration or under category (c) accessories of plant and machinery necessary to execute the contracts for Studio hire. In support of their contention that the lift was indispensable for the manufacturing process carried on in their premises and, therefore, it would come within the class of goods mentioned in category (b), the respondents also filed an affidavit by their technical manager. The Joint commercial Tax Officer, T. Nagar Division in the view that the certificate issued did not authorities the purchase of Otis lift by issue of'c'forms held that the respondents have committed an offence under s. 10 (b) and imposed a penalty of Rs. 2, 166. 15 under s. 10a of the Act. THIS order was confirmed by the AAC. But, on further appeal, the Tribunal was of the view that the Otis lift in question was intimately and essentially connected with the manufacturing process carried on in the laboratory of the assessees and that, therefore it would be deemed to have been included in the registration certificates. Though the Tribunal noted the argument of the respondents that in any case they acted bona fide in the belief that the article in question was covered by the registration certificate, it did not give any finding on that aspect. But, on the finding that the certificate of registration covered such otis lifts it held that the offence has not been committed and accordingly set aside the penalty levied. The Revenue has preferred this revision petition.

(2.) THE learned Government Pleader submitted this Otis lifts would not be covered by any of the class of goods mentioned in category (b) of the certificate of registration. He also contended that category (c)referred to in the certificate or registration is not available to the respondent, as s. 8 (3) of the Act has been amended w. e. f. 1st October, 1958 by act 31 of 1958 which excluded the goods required for use in the execution of contracts from the category of goods which could be covered by certificate of registration under that provision. On the other hand, the learned counsel for the respondents contended that Otis lifts will be covered in the class of goods referred to in category (b) of the certificate of registration. In any case, even if the legal position is that after the amendment of s. 8 w. e. f. 1st October, 1958, the goods referred to in category (c) would not be included in the certificate of registration, still since the certificate itself was not called for and amended, the respondents bona fide believed that it could rely on category'c'as well.

(3.) IT was then contended by the learned Counsel for the respondents that it will at least come under the category (c) of the certificate. Before considering the question whether it will come under the category (c) or not, we have to consider an incidental question as to whether category (c) was available to the respondents at all in this case. As already stated, s. 8 (3) was amended by deleting these classes of goods from the category of goods covered by that provision. We are not persuaded to hold that in spite of the amendment to the provision w. e. f. 1st October, 1958, the certificate continued to have validity. Such a contention would be wholly insupportable. When the provision is repealed, automatically the forms and the other certificates issued shall be deemed to have been pro tanto modified. A similar question came up for consideration before the Supreme Court in Modi spinning & Weaving Mills Co. , Ltd. vs. CST Punjab & Anr. In that case, the assessee-company purchased raw cotton in Punjab, ginned the cotton in its ginning mills in Punjab and sent the bales to its spinning and waving mills situated in the State of Uttar Pradesh for purposes of manufacture of cloth. In computing its taxable turnover, the assessee claimed to deduct a certain sum on account of raw cotton purchased by it on a certificate of registration granted to it in which there was no condition that the goods were for use by the assessee in the manufacture in State of Punjab of goods for sale'. Sec. 5 (2) (a) (ii) of the Punjab General ST Act, 1948, and r. 26 of the Punjab General st Rules, 1949 had, however, been amended to provide for that condition. The old certificate of registration issued to the assessee-company did not contain the words'in the State of Punjab'. The Supreme Court held that when the provisions in the Act and the Rules were amended by including the words'in the state of Punjab', the registration certificate also shall be deemed impliedly modified by including these words in the certificate itself. We also think that calling for the certificate again and cancelling the (c) categories in the certificates of registration is neither possible nor required. Once the goods themselves have been deleted from the category of goods under s. 8 (3), automatically it will not attract either the provisions of s. 8 (1) which enables the consessional rate of tax or the issue of'c'forms in respect of the same. We have to therefore proceed on the basis that there is no class of goods falling under the category (c) covered by the certificate of registration.