1997 (2) TMI 511 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the appellant committed an offence under section 10(d) of the Central Sales Tax Act, 1956.
2. Whether the goods purchased by issuing "C" forms satisfied the provisions under section 8(3)(b) of the Act.
3. Whether the penalty imposed under section 10A was justified.

Detailed Analysis:

Issue 1: Offence under Section 10(d) of the Central Sales Tax Act, 1956
The primary question in this appeal is whether the appellant committed an offence under section 10(d) of the Central Sales Tax Act, 1956. The appellant, an assessee on the file of the Additional Sales Tax Officer, effected inter-State purchase of machinery and chemicals by issuing "C" forms and used these goods in the manufacture of tread rubber as job-work for M/s. Vikrant Tyres Ltd. The Assessing Authority found that the appellant failed to satisfy the provisions in section 8(3)(b) of the Act, as the goods were used for job-work rather than for manufacturing goods for sale by the appellant itself. The Board of Revenue upheld this view, finding the appellant guilty of the offence under section 10(d).

Issue 2: Compliance with Section 8(3)(b) of the Act
Section 8(3)(b) specifies that goods purchased should be intended for resale or for use in the manufacture or processing of goods for sale. The appellant argued that it complied with this provision, as the tread rubber manufactured was used by M/s. Vikrant Tyres Ltd. to manufacture tyres, which were then sold. However, the court found that the appellant did not satisfy section 8(3)(b) because the tread rubber was not sold by the appellant, but was used in a job-work arrangement for M/s. Vikrant Tyres Ltd. The court emphasized that the goods purchased should be used by the assessee in the manufacture or processing of goods that are subject to sale by the assessee itself.

Issue 3: Justification of Penalty under Section 10A
The appellant contended that even if it had committed an offence under section 10(d), the maximum penalty imposed was unjustified due to the absence of contumacious conduct. However, the court noted that the appellant had not raised any objection regarding the quantum of penalty before the Board of Revenue or in the memorandum of appeal. Consequently, the court declined to consider the appellant's prayer for reduction of the penalty.

Conclusion:
The court dismissed the appeal, affirming the Board of Revenue's decision that the appellant committed an offence under section 10(d) and upheld the imposition of the maximum penalty under section 10A. The court found that the appellant failed to satisfy the provisions of section 8(3)(b) as the goods purchased were used in a job-work arrangement and not for the manufacture of goods for sale by the appellant itself. The appellant's contention regarding the quantum of penalty was not entertained due to the absence of prior objections on this matter.