2004 (5) TMI 608 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under Section 10-A of the Central Sales Tax Act for wrong issuance of Form 'C' on specific goods.
2. Validity of penalty imposition on the purchase of a Diesel Generating Set against Form 'C'.

Analysis:
Issue 1:
The revision pertains to penalty proceedings under Section 10-A of the Central Sales Tax Act for the Assessment Year 1984-85, involving the dealer-applicant engaged in the manufacture and sale of country liquor and spirit. The penalty was imposed for the wrong issuance of Form 'C' on goods like Diesel Generating Set, Rubber Hoze Pipe, Oil, and Paints and Chemicals. The penalty amount was confirmed by the Assistant Commissioner (Judicial) and upheld by the Tribunal.

Issue 2:
The main contention in the revision focused on the levy of penalty specifically on the purchase of a Diesel Generating Set against Form 'C'. The dealer argued that the Diesel Generating Set was essential for running the Plant and Machinery, falling under the category of 'Plant and Machinery' as per the registration certificate. Reference was made to Rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957, which outlines the permissible goods for purchase by a registered dealer. Citing precedents like M/s. Valley Fruits Product Co. Ltd. v. Commissioner of Sales Tax and M/s. Snow White Industries v. Commissioner of Sales Tax, it was argued that the Generator could be purchased using Form 'C' for operational purposes within the manufacturing process. The court found that the electricity generated by the Generator was solely used for running the Plant, aligning with the judgments cited. Consequently, the penalty on the purchase of the Generator against Form 'C' was set aside, and the revision was partially allowed, with directions for further proceedings under the U.P. Trade Tax Act.

In conclusion, the judgment addressed the penalty imposition under Section 10-A of the Central Sales Tax Act, focusing on the specific issue of penalty validity concerning the purchase of a Diesel Generating Set against Form 'C'. The court's decision was based on the interpretation of relevant rules and precedents, ultimately leading to the setting aside of the penalty in question.