CHOKRAYAT COLD STORAGE Vs. COMMISSIONER TRADE

JUDGEMENT

(1.) PRESENT revision under Section 11 of U. P. Trade Tax Act (hereinafter referred to as 'Act') is directed against the order of Tribunal dated 01.02.2006 relating to assessment year 1997 -98 under the Central Sales Tax Act.

(2.) THE brief facts of the case are that the applicant was granted registration under Section 7 (2) read with Section 8(3) (b) of the Act for the period 24.05.1997 to 01.09.1997 for processing of Potato, vegetable and fruits and for manufacturing and sales of Ice and was authorized to purchase machinery, machinery spare parts, Compressor, Electrical Motor, Pump Starter, Amoniya Gas, Tools, Iron Pipes, electric goods, iron steel, Hardware, Cement, Wood, Rodi Buderpur etc. During the year under consideration, applicant had purchased machinery for Rs. 7,74,482/ -from outside the State of U. P. and issued Form -C in respect thereof. Such machinery were admittedly used in the construction of Cold Storage. Admittedly, during this year, Ice had not been manufactured and sold. The Assessing Authority issued notice under Section 10 -A of the Act on the ground that the dealer had imported Compressor, Electrical Motor etc. and used in the construction of Cold Storage while these goods should have been used in the manufacturing of goods for sale. According to the Assessing Authority, Registration Certificate had been misused and as such, applicant was liable for penalty. Applicant filed reply to the Show -cause -notice and stated that the machinery etc. were used in the construction of Cold Storage required for processing of Potato, vegetable goods and fruits. It has been stated that due to non completion of Ice Chamber, Ice have not been manufactured and sold. The Assessing Authority, however, had not accepted the plea of the applicant and levied the penalty at Rs. l, 12,568/ -under Section 10 -A of the Act. The Assessing Authority held that the applicant had not manufactured any goods for sale and admitted that it had not manufactured Ice. Being aggrieved by the penalty order, applicant filed appeal before the Deputy Commissioner (Appeals), Trade Tax. The Deputy Commissioner Appeals), Trade Tax vide order dated 29.7.2002, allowed the appeal and set aside the penalty order. Being aggrieved by the order of the Deputy Commissioner (Appeals), Trade Tax, Commissioner of Trade Tax filed appeal before the Tribunal. The Tribunal by the impugned order, allowed the appeal in part. The Tribunal held that the applicant has violated the provisions of Section 10(b) of the Central Sales Tax Act, but has reduced the amount of penalty to Rs. 62,000/ -.

(3.) LEARNED Counsel for the applicant submitted that the applicant had been granted registration for processing of Potato, vegetable and fruits and for manufacturing and sales of Ice. He submitted that the machinery, which were purchased, were used in the construction of Cold Storage and for Ice Factory. He submitted that during the year under consideration, Ice could not be manufactured Ml because Ice Chamber could not be constructed. He submitted that the machinery which were installed, were for Cold Storage as well as for manufacturing of Ice. He submitted that in the Cold Storage during the preservation, processing of Potato, vegetable and fruits are involved, therefore, there was no violation of Section 10(d) of the Act. He further submitted that under the bonafide belief that since the registration was granted for the purposes of processing of Potato, vegetable and fruits, applicant had imported machinery from outside the State of U. P. against Form -C and used in the construction of Cold Storage, in which, the processing of Potato vegetable and fruits were involved. He relied upon the decision of this Court in the case of Raghubir Cold Storage, Mainpuri v. Commissioner of Sales Tax, U. P. Lucknow reported in 1995 STI 18. Learned Standing Counsel submitted that the Apex Court in the case of Delhi Cold Storage Private Limited v. CIT reported in : [1991]191ITR656(SC) , held that in a Cold Storage, the goods are preserved by refrigeration and in the process, articles does not undergo processing.