1991 (10) TMI 292 - HC - VAT and Sales Tax

Summary

Issues: Misuse of form "C" for purchase of plastic goods, violation of section 10(d) of the Act, imposition of penalty, resale of goods, payment of sales tax on resale.

Analysis:
The appellants, registered under the Central Sales Tax Act, purchased plastic goods using form "C" for resale but distributed them as complimentary items to customers. The assessing authority imposed a penalty for violating section 10(d) of the Act. The Appellate Assistant Commissioner initially ruled in favor of the appellants, stating that the plastic goods were included in the articles sold and sales tax was remitted. However, the Joint Commissioner, using suo motu powers, set aside the ruling and imposed the penalty. The appellants argued no misuse of form "C" occurred as the plastic goods were distributed with sold items. The Court disagreed, citing section 10(d) and section 8(3)(b) of the Act, which penalize failure to "resell" goods purchased using concessional tax rates. The Court noted the plastic goods were not resold, as no sales tax was remitted on them, and were given away as complimentary items. The Appellate Assistant Commissioner's error in assuming the plastic goods were resold was highlighted, as no evidence of sales tax remittance on plastic goods resale existed.

The Court emphasized that the plastic goods were used for purposes other than resale, violating the registration certificate's specific purpose condition. The lack of sales tax remittance on alleged resale indicated no actual resale occurred. The appellants failed to provide a reasonable excuse for deviating from the intended use of the goods. Consequently, the Joint Commissioner's decision to impose the penalty was deemed justified. The Court upheld the penalty, dismissing the appeal. No costs were awarded in the case.