1985 (7) TMI 335 - HC - VAT and Sales Tax

Summary

Issues:
Petition under section 15(2)(b) of the Rajasthan Sales Tax Act, 1954 for directing the Board of Revenue to state the case and refer the question of law arising out of its order. Penalty imposed under section 10A of the Central Sales Tax Act for utilizing goods imported on the strength of C forms in job-work. Interpretation of provisions regarding penalty under Central Sales Tax Act.

Analysis:
The case involved a petition under section 15(2)(b) of the Rajasthan Sales Tax Act, 1954, seeking direction for the Board of Revenue to refer a question of law arising from its order. The issue revolved around the imposition of a penalty under section 10A of the Central Sales Tax Act for utilizing goods imported on the basis of C forms in job-work. The central question was whether the penalty was justified in such circumstances.

The dealer-assessee, a partnership firm engaged in processing marble stones, imported diesel and mobile oil at a concessional rate by furnishing C forms. The goods were used in processing marble stones belonging to other persons on a job-work basis. The assessing authority imposed a penalty under section 10A of the Central Sales Tax Act, contending that the goods were not intended for sale but were redelivered to the customers. The penalty was upheld by the Deputy Commissioner but later set aside by the Board of Revenue.

The Court referred to relevant legal precedents, including a Supreme Court judgment, to determine the applicability of the penalty provision. Citing the Supreme Court ruling, the Court held that no penalty could be imposed under section 10A if the goods were used in job-work but intended for sale by the third party. As the goods in question were utilized in job-work for processing marble stones, the penalty was deemed unjustified.

Based on the authoritative pronouncement of the Supreme Court and the interpretation of the relevant provisions, the Court concluded that the penalty under section 10A of the Central Sales Tax Act was not imposable in this case. Therefore, the Board of Revenue's decision to set aside the penalty was deemed correct and justified. The petition under section 15(2)(b) of the Act, treated as a revision, was ultimately dismissed, with no order as to costs.

In summary, the judgment clarified the application of penalty provisions under the Central Sales Tax Act in cases where goods imported on C forms were utilized in job-work. It emphasized the requirement that the goods must be intended for sale by the third party to justify the imposition of a penalty. The decision provided clarity on the interpretation of the law in such scenarios and upheld the Board of Revenue's ruling to set aside the penalty in this particular case.