RAJASTHAN STATE ELECTRICITY BOARD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THESE two references have been made by the Board of Revenue for Rajasthan at Ajmer under section 15 of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act"), at the instance of the assessee, the Rajasthan State Electricity Board, Jaipur (hereinafter referred to as "the Electricity Board" ). The Rajasthan State Electricity Board is a corporation engaged in the generation and distribution of electrical energy in the State of Rajasthan, and is registered as a dealer under the Act and the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act" ). Registration certificates were granted by the Sales Tax Officer, B Circle, Jaipur, to the Electricity Board on the basis of which it was entitled to purchase goods against C forms. The Electricity Board imported certain goods against C forms in the State of Rajasthan on payment of concessional rate of tax under the Central Sales Tax Act. But the Sales tax Officer objected to the purchase of tyres and tubes of motor vehicles, battery cells, varnish and paints, soaps, raincoats and iron safes against C forms by the Electricity Board and held that the aforesaid goods were not used for the generation and distribution of electricity and, as such, tax to the full extent payable under the Central Act should have been paid by the Electricity Board and as he was of the opinion that the Electricity Board misused the C forms in the purhase of the aforesaid articles, he held that the Electricity Board was liable to payment of penalty under section 10a of the Central Sales Tax Act. The Electricity Board preferred an appeal to the Deputy Commissioner, Excise and Taxation (Appeals), Ajmer and Kota Division, Jaipur, who was of the opinion that the import of soaps to the extent of half of the quantity may be considered as of utility in the maintenance, etc. , of the machines and half may be considered as irregular import on C forms, while the purchase of varnish and paints was considered to be for the generation of electricity as the same were required for the cleaning and painting of the machines and boilers. Similarly, tyres and tubes were also held to be essential for the transmission of electricity, but the remaining articles, i. e. , iron safes, raincoats and battery cells were considered to be commodities which had no direct utility in the generation and distribution of electricity. Thus, the appeal preferred by the Electricity Board was partly allowed by the Deputy Commissioner. Then a revision was preferred to the Board of Revenue. The learned single Member of the Board of Revenue by his order dated 18th December, 1964, partly accepted the revision petition and set aside the order of the Deputy Commissioner as well as of the Sales Tax Officer and remanded the matter back to him for fresh orders after investigation and hearing the Electricity Board. However, the learned Member of the Board of Revenue held that paints could be imported to the extent they are required for painting of electrical goods and battery cells could be purchased on C forms so far as they were necessary for the linesmen to work at night on the transmission towers to rectify electrical faults, but in respect of the remaining items, iron safes, raincoats, tyres and tubes, the learned single Member of the Board of Revenue held that they were of no use for the generation or distribution of electricity. The Electricity Board, thereupon, applied to the Board of Revenue for making a reference to this Court, but the reference application was rejected by the learned Member of the Board of Revenue by his order dated 1st October, 1965. Then, an application was preferred to this Court under section 15 (2) (b) of the Act and by order dated 27th September, 1966, this Court directed the Board of Revenue to refer the following two questions for decision by this Court along with the statement of the case : " (1) Whether, on the facts and in the circumstances of the case, the application is entitled to purchase the goods, tyres, tubes, raincoats, soaps, etc. , against C forms and no case of misuse of C forms is made out against the applicant ? (2) Whether, on the facts and in the circumstances of the case, tyres, tubes, raincoats and soaps, etc. , are covered in the list given in the Central registration certificate, exhibit 1, and the applicant has rightly used the C forms for the purchase of the said goods ?"

(2.) IT is in this manner that Reference Case No. 1 of 1967 has come up before us. The Electricity Board felt that the Central registration certificate issued under the Central Sales Tax, 1956, was ambiguous and confusing and was not clear in respect of the goods which the Electricity Board could purchase against C forms. The Electricity Board, therefore, filed an application dated 3rd November, 1962, before the Sales Tax Officer, B Circle, Jaipur, for an amendment of the Central registration certificate by making the following additions : " Tools and plants including vehicles and other transportable goods including their spare parts, tubes and tyres, used/employed for the purpose of construction, operation and maintenance of the power system (generation, transmission and distribution ). "

(3.) IN exercise of the powers conferred by section 13 (1) (e) of the Central Act, the Central Government has made rule 13 of the Central Sales tax (Registration and Turnover) Rules, 1957, which runs as under : " 13. Prescription of goods for certain purposes.- The goods referred to in clause (b) of subsection (3) of section 8 which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel, or lubricants, in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. "