COMMISSIONER TRADE TAX Vs. JYOTI RUBBER WORKS

JUDGEMENT

(1.) These two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 28.04.1995 relating to the assessment years 1986-87 and 87-88 under the Central Sales Tax Act, by which Tribunal has deleted the penalty levied under Section 10-A of the Act.

(2.) Brief facts of the case are that the dealer/opposite party (hereinafter referred to as "Dealer") was registered under the Central Sales Tax Act for the purchase of rubber chemical at concessional rate, which was to be used in the manufacturing. During the year under consideration, dealer had purchased rubber and chemical from outside the State of U.P. and issued Form -C. Such rubber and chemical have been used in the manufacturing of roller and have also been used for rubberisation on the roller on job work basis. Assessing authority initiated the penalty proceedings under Section 10-A of the Act for the violation of Section 10( d) of the Act. Dealer filed reply, which was not accepted and the penalty was levied. First appeals filed by the dealer were rejected. Dealer filed second appeals before the Tribunal, which have been allowed by the impugned order.

(3.) Tribunal held that in the case of The State of Tamil Nadu v. Dunlop India Limited, reported in 48 STC, 521, rubberisation on the roller was held as sale of rubberized item but subsequently in the case of Sundaram Industries v. State of Tamil Nadu, reported in 82 STC, 194, rubberisation on the customer roller has been held works contract and, therefore, it has been held that the use of the rubber and chemical in the rubberisation on the roller, which was in the nature of job work was under the bonafide belief, which amounts to reasonable cause.