1979 (4) TMI 152 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to purchase certain goods against C forms.
2. Misuse of C forms.
3. Amendment of the Central registration certificate.

Issue-wise Detailed Analysis:

1. Entitlement to Purchase Certain Goods Against C Forms:
The primary issue was whether the Rajasthan State Electricity Board (Electricity Board) was entitled to purchase goods such as tyres, tubes, raincoats, soaps, etc., against C forms without misuse. The court considered the argument that these goods were used for the construction, operation, and maintenance of the power system, including generation, transmission, and distribution of electricity. The court examined the relevant provisions of the Central Sales Tax Act, 1956, particularly section 8(3)(b), which specifies the goods that can be purchased at a concessional rate. The court held that motor vehicles (trucks, trolleys, trailers), their accessories, spare parts, tyres, and tubes could be purchased at a concessional rate as they were necessary for the carriage of cables, poles, wires, and other electrical equipment. The court also allowed the purchase of soaps, paints, and varnishes for cleaning and painting machinery, and raincoats and battery cells for use by linesmen during adverse weather conditions.

2. Misuse of C Forms:
The Sales Tax Officer initially objected to the purchase of certain goods against C forms, holding that they were not used for the generation and distribution of electricity, thus constituting misuse. The court evaluated the extent to which these goods were necessary for the Electricity Board's operations. It was concluded that while the purchase of iron safes and battery cells for general purposes was not justified, the purchase of battery cells for linesmen working at night, and raincoats for linesmen during rainy seasons, was permissible. The court found that the Electricity Board had rightly used C forms for the purchase of these goods to the extent indicated, but not for iron safes or for general use of battery cells, soaps, varnishes, and paints.

3. Amendment of the Central Registration Certificate:
The Electricity Board sought an amendment to its Central registration certificate to include "tools and plants including vehicles and other transportable goods including their spare parts, tubes, and tyres." The Sales Tax Officer rejected this application, but the Deputy Commissioner allowed it on appeal. The Board of Revenue later reversed this decision, holding that motor vehicles could not be justified for purchase on C forms. The court, however, concluded that the Electricity Board was entitled to the amendment, allowing the inclusion of these items in the registration certificate, as they were necessary for the construction, operation, and maintenance of the power system.

Conclusion:
The court answered the references by holding that the Electricity Board could purchase motor vehicles (trucks, trolleys, trailers), their accessories, spare parts, tyres, tubes, soaps, paints, varnishes, raincoats, and battery cells at concessional rates, but only to the extent necessary for specific purposes related to the generation, transmission, and distribution of electricity. The Electricity Board was also entitled to amend its registration certificate to include these items. The references were answered accordingly.