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1985 (7) TMI 332 - HC - VAT and Sales Tax
Issues:
Challenge to penalty imposed under section 16(1)(k) of the Rajasthan Sales Tax Act, 1954. Detailed Analysis: The case involved an application under section 15(2)(b) of the Rajasthan Sales Tax Act for directing the Board of Revenue to refer a question of law regarding the imposition of a penalty of Rs. 25,000 under section 16(1)(k) of the Act. The dealer purchased cotton in Rajasthan, resold ginned cotton within the state, but exported cotton seeds without paying sales tax on them. The penalty was set aside by the Deputy Commissioner (Appeals) and upheld by the Board. The key issue was whether there was a violation of the declaration given by the dealer in form S.T. 17 and whether ginned cotton and cotton seeds are the same commodity. The court referred to relevant case law to establish that ginned cotton and cotton seeds are distinct commodities, supporting the Board's decision that the dealer did not misuse the declaration. The court analyzed section 16(1)(k) of the Act, which pertains to failing to use goods for declared purposes after making a declaration under the Act. The court referred to a Supreme Court judgment to establish that ginned cotton and cotton seeds are separate commodities, even though cotton seeds are a by-product of ginning. The court also cited a previous case where it was held that cotton seeds are different from cotton and are not covered under the declaration for sale within the state. This analysis formed the basis for concluding that the penalty imposed on the dealer was not justified as there was no breach of the declaration made in form S.T. 17. Ultimately, the court upheld the Board's decision to set aside the penalty under section 16(1)(k) of the Act. The court maintained that ginned cotton and cotton seeds are distinct commodities, and since the dealer had complied with the declaration by selling ginned cotton within the state, the penalty was unwarranted. The application, treated as a revision under the amended Act, was dismissed, and no costs were awarded.
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