COMMISSIONER OF SALES TAX Vs. SADHANA PRESS

JUDGEMENT

(1.) These nine revisions are at the instance of Commissioner of Sales Tax and relate to the assessment years 1981-82 to 1989-90. All these revisions arise out of common order dated July 17, 1993. Identical questions of law and fact are involved in these revisions. The learned Counsel for both the parties made submissions with reference to the facts given in Sales Tax Revision No. 1728 of 1993 and submitted that the facts are similar in other sales tax revisions also. In view of this the necessary facts which emerge from the Sales Tax Revision No. 1728 of 1993 are being noticed herein in brief.

(2.) The factual scenario is almost undisputed. The opposite- party deals in paper, etc., and printing on job-work. It is a registered dealer Under Section 7(1) and 7(2) of the Central Sales Tax Act, 1956. A copy of the registration certificate has been filed as annexure 7. The dealer-opposite party has been authorised to purchase tissue paper, craft paper and printing ink for resale. It is also authorised to purchase tissue paper, craft paper, printing ink for use in production or manufacturing process.

(3.) The assessing authority for all these assessment years issued show cause notices Under Section 10-A of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act") as to why penalty be not imposed for purchase of printing ink worth Rs. 2,29,179, chemicals, machinery parts and rubber roller, etc., worth Rs. 29,332.62 from outside State of U.P. against the form C at concessional rate of tax. According to the department the dealer has made total purchase of Rs. 2,58,501.60 from outside the State of U.P. by unauthorisedly using form C, at concessional rate of tax. The case of the department was that the dealer was entitled to purchase from outside the State of U.P. tissue paper, craft paper and printing ink for resale or for use in the manufacture or processing of goods for sale, against form C. In reply to the show cause notice the dealer came out with the case that he has been purchasing these goods against form C since long time. The assessing authority took the view that the dealer has not sold the goods, thus, purchased against form C. Reliance was placed upon a judgment of the Supreme Court given in the case of Assessing Authority-Cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239. It has held that in view of the fact that the job-work was done by the dealer for others and there is no evidence that such other persons have sold the goods, therefore, the goods, thus, purchased were not used "for sale". Penalty Under Section 10-A at the rate of 15 per cent was levied. This order was modified by the appellate authority. The appellate authority has set aside the levy of penalty on ink, thus, purchased and reduced the quantum of penalty from 15 per cent to 10 per cent on the purchase of machinery parts, rubber roller, etc. Against the order of the appellate authority both the department as well as the dealer filed second appeals before the Tribunal. The Tribunal by the order under revision has set aside the entire penalty order Under Section 10-A of the Act on two grounds. Firstly, the certificate of registration was granted by the Sales Tax Officer, Sector 3, Moradabad. The penalty was levied by the Assistant Commissioner (A), Sales Tax, to whom the assessment was transferred by the order of the Commissioner of Sales Tax. The Assistant Commissioner (A) was not competent to impose the penalty as the registration was not granted by him. He had no jurisdiction to impose the penalty Under Section 10-A of the Act. Secondly, the department having not raised any objection regarding the practice of the dealer to issue form C in importing the goods right from the very beginning for which he was not empowered or authorised, therefore, there was no mens rea on the part of the assessee. Hence no penalty could be levied.