CHANDPUR SUGAR CO LTD Vs. COMMISSIONER SALES TAX

JUDGEMENT

(1.) The present revision arises out of penalty proceedings under Section 10-A of the Central Sales Tax Act, 1956. The dispute relates to the assessment year 1984-85. The penalty proceedings were initiated for making false representation by issuing the form C to the selling dealer by the applicant that it is authorised to make purchases at the concessional rate of tax. The applicant has been granted registration certificate both under Sections 7(1) and 7(2) of the Central Sales Tax Act. A copy of the registration certificate has been filed by the parties before this Court. In the said registration certificate which is effective from May 29, 1976, the dealer has been authorised to issue form C in respect of various items mentioned in the registration certificate. One of the items mentioned in the said registration certificate is at the Serial No. 20. Against the Serial No. 20 "machine tools" is mentioned. The assessing officer issued a show cause notice to the dealer to show cause as to why penalty should not be imposed for issuing form C in respect of various items which are not covered by the registration certificate. Although in the show cause notice the department objected the issuance of form C in respect of number of items but since the penalty has been levied only in respect of three items enumerated below, therefore, it is not necessary to refer the other items mentioned in the show cause notice. These three items are "wielding material", "parts of bag sewing machines" and "paints and varnish". The assessing officer was of the view that the dealer has unauthorisedly issued form C in respect of the aforesaid three items as they are not covered by the registration certificate. A copy of the reply of the show cause notice has been annexed as annexure No. 2 to the supplementary counter-affidavit filed on behalf of the department in this Court. The dealer submitted that he was authorised to issue form C in respect of all the three items mentioned above as they are covered by the registration certificate issued in his favour. It was submitted that the "wielding material" is covered by machinery store. Similarly "parts of bag sewing machine" is stores as it is used in sewing bags. The "paints and varnish" are covered under the entry "chemical".

(2.) The assessing authority by its order dated February 13, 1990 after consideration and rejection of the reply to the show cause notice levied a penalty of a sum of Rs. 69,875 in all. The said order has been confirmed by the Assistant Commissioner (Judicial) by the order dated March 31, 1990, in appeal. The Tribunal has dismissed the second appeal by the order under revision.

(3.) Heard the counsel for the parties and perused the record. The learned counsel for the applicant submitted that the "wielding material" imported in State of U.P. against form C is covered under entry No. 20 of the registration certificate. In other words it is nothing but "machine tools". In support of his submission he has placed reliance upon two judgments of this Court in the case of (1) Wasti Ram & Sons v. Commissioner, Sales Tax 1987 UPTC 1366 and (2) Commissioner, Sales Tax, U.P., Lucknow v. Tek Invest (India) Pvt. Ltd. [2003] 133 STC 148 ; 1998 UPTC 128. In my view none of the aforesaid judgments have any application to the facts of the present case. Neither the learned counsel for the dealer nor the learned Standing Counsel could point out as to what is meaning of "machine tools". The dealer has justified issuance of form C with reference to the "machine tools" for the purchases of "wielding material". On a plain reading "wielding material" cannot be treated as "machine tools". In the case of Wasti Ram and Sons 1987 UPTC 1366, the assessee was granted registration certificate enabling him to import "mill stores" for use in the manufacturing process of rice. The assessee had imported automatic parboil paddy driers, paddy dehusker and wielding machine. In para 9 of the aforesaid judgment it was held therein that these items imported by the assessee cannot be said to be "mill stores", which expression refers to small tools and spare parts of the machinery. However, this Court set aside the order of penalty not on the question as to what does the expression "mill stores" actually means. But on the question that the assessee all through stated that it bona fide believed that the machinery imported thereby was fully covered by the term "mill stores". Therefore, the said case was decided on a different issue. In the case in hand "mill store" is not mentioned in the registration certificate of the dealer.