COMMERCIAL TAXES OFFICER Vs. GADIA TEXTILES

JUDGEMENT

(1.) THIS is an application under Section 15(2)(b) of the Rajasthan Sales Tax Act, 1954 (No. 29 of 1954) (for short 'the Act'), for directing the Board of Revenue for Rajasthan at Ajmer ('?the Board' herein) to state the case and to refer the following questions of law arising out of its appellate order dated July 2, 1982 which it has refused to do by its order dated February 16, 1983 :

(2.) NON -petitioner No. 1, M/s. Gadia Textiles, Pali (the manufacturer), is a partnership firm of Pali carrying on the business of dyeing and printing cloth and selling it in the market. The case relates to the period July 26, 1972 to March 4, 1973. The cloth, i.e., cotton fabrics were exempt from levy of tax under Section 4(1) of the Act. The subsequent period involved is March 5, 1973 to July 16, 1973. By a notification issued in exercise of the powers conferred by Sub -section (2) of Section 4 of the Act and in supersession of all previous notifications so far as they relate to the exemption of goods, the State Government by means of S. O. 129/F. 2(12)FD/Gr. IV/73/2 dated March 6, 1973 exempted from tax the sale or purchase of cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco as defined in the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957).

(3.) BEING dissatisfied with the order dated February 16, 1979, the assessing authority filed a revision application before the Board. A Single Member of the Board by his order dated January 28, 1982 dismissed the revision along with seven other similar revisions by a common order. The Single Member of the Board while dismissing the revision pbserved as under : In the present batch of eight cases also we find that the dealers had dealt with in textiles totally exempted from tax and this has been accepted by the department. But the dealers had also purchased chemicals and dyes for printing and it has been observed that a separate stock register should have been maintained. It is not observed by the assessing authority that the dealers in the past also had omitted to maintain stock registers and they had been warned that henceforth they should maintain the stock register. It also does not appear that these were fresh registers. It also does not appear that these were fresh dealers, who were assessed to 'nil' tax for the first time. Sub -rule (2) of Rule 42 states that 'every manufacturer liable to pay tax under the Act shall also maintain a stock book in respect of raw materials and of finished goods', certainly the eight dealers had been assessed to 'nil' tax and the department had accepted their contention that the turnover was wholly of sales of exempted goods, namely, the textiles. If the assessing authority had made any observation that the total quantity of raw materials purchased is not commensurate with their use in the printing of exempted goods and some more raw materials must have been misused, one can understand about the imposition of penalty. In other words; the penalty has been imposed only on a technical ground that the stock register was not maintained. As the dealers were not liable to tax, since they dealt with only exempted goods, I do not think that these are fit cases to be admitted only for a technical omission to maintain stock registers when in the previous years no such warning was given asking the dealers to maintain such stock registers.