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TMI Blog1975 (11) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... has been imposed is said to be that of section 10(b) and (d). To understand the case of the department that there has been violation of section 10(b) and (d), it is necessary to refer to section 8 of the Act. That section provides that every dealer, who, in the course of inter-State trade or commerce, sells to the Government any goods or sells to a registered dealer other than the Government goods of the description referred to in sub-section (3), shall be liable to pay tax under the Act, which shall be three per cent of his turnover. Sub-section (3) of section 8 with which we are concerned, states that the goods referred to in clause (b) of subsection (1) are goods of the class or classes specified in the certificate of registration of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for use in the manufacture or processing of goods for sales specified in the registration certificate granted to them." 3.. The appellants in Writ Appeal No. 281 of 1973 showed cause against the imposition of penalty for alleged breach of sub-sections (b) and (d) of section 10 of the Act. Notwithstanding the explanation, penalty has been imposed by exhibit P6 order. The relevant part of that order says nothing more than what is stated in the show cause notice, excepting the observations: "I have carefully examined the contents of the objection filed. The firm has not adduced any valid evidence in support of this contention that there was no misuse of C forms." 4.. Counsel on behalf of the appellants in Writ Appeal No. 281 of 1973 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant forms are form A, the application for registration, and form B, the certificate of registration. It appears to us that in view of the provision in section 8(3)(b) of the Act in para 16 in form A, as well as in the certificate of registration, space should have been provided for specifying the goods or classes of goods with reference to which the application is made and with reference to which the certificate had been granted. Para 16 in form A starts by saying: "The following goods or classes of goods". But without any gap, proceeds to say "are purchased by the dealer in the course of inter-State trade or commerce for "; and then comes below the words "resale", "use in the manufacture or processing of goods for sale", "use in min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as such might give an impression that the machinery, which is to be utilised for the manufacture of goods for resale, will not by itself fall within the ambit of this section. That is the view that the learned Judge has taken in the judgment under appeal. But section 8(3)(b), specifically states, "subject to rules" and so we have necessarily to go through the relevant rule to understand the scope and ambit of the section. The relevant rule is rule 13 of the Rules, which is in these terms: "The goods referred to in clause (b) of sub-section (3) of section 8, which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned by the dealer. If that be so, there cannot be any violation of sub-section (b) of section 10 of the Act, while issuing the C forms stating that the machinery and equipments purchased are covered by the certificate of registration. It follows that there has been no violation of sub-section (b) of section 10 of the Act. 6.. It is admitted on all hands that the assessee did not use the machinery and equipment for the manufacture or processing of goods for sale. It appears that the dealer did not obtain the necessary machinery for manufacture of the goods, which were to be calendered. That was the explanation offered by the counsel on behalf of the dealer before us. The question then is because of the non-user of the machinery for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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