SENTHIL ENTERPRISES Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) DESIRABLE it is, to pen down a common judgment in all these actions, inasmuch as the points involved for consideration are one and the same, relatable to the same assessee-dealer, in respect of four assessment years, namely, 1984-85 to 1987-88, concerning the use of the goods for a purpose other than the one for which the goods had been incorporated in the certificate of registration, culminating in the imposition of penalty under section 10-A, for violation or infraction of clause (d) of section 10 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956 - for short "CSTA" or Principal Act").

(2.) (a) The assessee-dealers - Senthil Enterprises, having their place of business at door No. 121, Sarojini Street, Ramnagar, Coimbatore - 641 009 are dealers registered under CSTA. (b) They, it appears, filed an application to the concerned authority in form "A" specifying the goods to be incorporated in the certificate of registration. In the said application, they, it appears, had stated that their business was mainly dealing in explosive items. They had specified the explosives under the caption "for resale", so as to avail of the benefit of concessional rate of taxation at four per cent on inter-State purchases of explosives they have made for purpose of resale. (c) They, it appears, filed an application subsequently on April 1, 1984 to amend the original certificate of registration issued in their favour. The amendment sought for in the said application was for the inclusion of "explosives" under the caption "for use in mining." (d) The amendment prayed therefor by the assessee-dealers was granted, in the sense of including the "explosives" under the caption "for use in mining" with effect from April 3, 1984. Though they had sought for such an amendment, yet, they did not pray for any amendment, as relatable to their business activity concerning mining, apart from mainly dealing in explosive items, as stated in the original application culminating in the certificate issued therefor. (e) For mining - whether available in the surface soil or in sub-soil - whether in ryotwari patta land or any Revenue land belonging to the Government - the requisite licence or permission is necessary from the competent authority, as had been specifically provided in the Mines and Minerals (regulation and Development) Act, 1957 [Act. No. 67 of 1957 - for short "MM (RD) Act"] and the Mineral Concession Rules - Central or State - framed thereunder. The assessee-dealers, it appears, did not have the requisite licence or permission from the competent authority to indulge in an activity of mining. (f) The Deputy Commercial Tax Officer, Enforcement IV, Coimbatore, it appears, made a surprise inspection at 11.30 a.m. on June 27, 1985 of the place of business of the assessee-dealers. During the course of such inspection, a statement, it is said, had been recorded from one R. Prabhakaran, the manager-in-charge of the business of the assessee-dealers. The statement so recorded disclosed the nature of the activity of assessee-dealers involving in utilisation of explosives for depending of wells and blasting of rocks. (g) The Commercial Tax Officer, Trichy Road Circle, Coimbatore, imposed penalty, in a quantified sum upon the assessee-dealers under section 10-A, in lieu of prosecution for violation or infraction of section 10(d) of CSTA for the assessment years 1984-85, 1985-86, 1986-87 and 1987-88, holding that the activity of the assessee-dealers was not "mining activity". The order imposing penalty upon the assessee-dealers relatable to 1984-85 is dated March 22, 1990, while the orders for the rest of the three assessment years, namely, 1985-86 to 1987-88 are all of even date, that is to say, April 9, 1990.

(3.) FROM the pith and submissions of Mr. C. Natarajan, learned Senior Counsel representing Mr. N. Inbarajan, learned counsel appearing for the assessee-dealers and Mr. K. Elango, learned Government Advocate (Taxes), representing the Revenue, the points, as below emerge for consideration : (1) Whether the assessee-dealers could be stated to have used "explosives" in "mining", in the activity of "deepening of wells and blasting of rocks" within sub-section (3) of section 8 of CSTA ? (2) Whether the assessee-dealers had the benefit of reasonable excuse, having regard to the different interpretations on the expression "use in mining" at different stages of appeal and revision. (3) Whether the successor-Joint Commissioner had jurisdiction to exercise the power under section 34 read with section 55 TNGSTA, having regard to the fact that the very issue had been enquired into and proceeding dropped, at an earlier stage by the predecessor-Joint Commissioner ?