9911796707
TMI Blog1984 (5) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... known as Registration and Turnover Rules, 1957. The company has also a printing section in its Munger factory with machines for printing shells and labels, etc., for packing the products manufactured and sold by the company containing representations of various trade marks as the products cannot be sold in loose. For the purpose of packing the products the petitioner-company purchases large quantities of papers and boards inside the State as well as from outside the State of Bihar. The registration certificate granted to the company under the Central Act in the prescribed form also mentions papers and boards for use by the company in the packing of its materials. During the relevant year the company purchased papers and boards from outside the State of Bihar under the declaration issued by it in the prescribed C form. It may be mentioned that on this account the petitioner-company had to pay tax only at the rate of 4% in place of 10% as provided under section 8 of the Central Act. Undisputedly the company despatched some of the materials to its other factories and branches outside the State of Bihar for their consumption/use "as inter-branch transfers" and it is not disputed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,55,06,293.87. It further purchased paper, printing ink, board, etc., after furnishing declaration, worth Rs. 9,21,899.03. The total value of the goods consumed after furnishing form C was calculated at Rs. 1,34,10,164.08 on which the value of goods consumed after furnishing declaration in form IX amounting to Rs. 2,35,06,293.87 was added. It was found that goods worth Rs. 1,76,88,177 was consumed by the petitioner and the remaining materials of the value of Rs. 1,35,02,870.00 was transferred outside the State of Bihar, tax on this amount was calculated at Rs. 8,10,172.20 The same amount of penalty was also imposed under section 10A in lieu of prosecution after adding Central sales tax of Rs. 1,34,464.59. 7.. The original assessment order was, however, quashed by this Court in C.W.J.C. No. 629 of 1978 (annexure 11) on the ground that notice under section 10A was not properly served. This Court had directed in the remand order that the matter should be examined in the light of the judgment of the Supreme Court in the case of Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner of Sales Tax, New Delhi [1978] 41 STC 409 (SC); AIR 1978 SC 897 and it is thereafter that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was entitled to use the materials purchased for packing of the goods for sale at any place of business for the same purpose and thus it committed no violation of any of the legal provisions because it is not disputed that the shells and labels which were transferred to the company's branches outside the State of Bihar were actually used in the packing of the goods manufactured by the company for sale, and therefore, it was argued that the declaration given by the company in form C had been legally carried out and that in any case, there was no mens rea on the part of the company. The arguments, as already said earlier, were rejected. 8.. Section 10 which deals with penalties, inter alia, provides that if any person "after purchasing any goods for any of the purposes specified in clause (b) or clause (c) or clause (d) of sub-section (3) of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose he shall be punishable Section 10A provides for imposition of penalty in lieu of prosecution by a sum not exceeding one-and-a-half times the tax which would have been levied under section 8(2) in respect of the sale to him of the goods, if the sale had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... straining the language of the enactment too much to say that the words 'by him' are intended to mean 'by him as a registered dealer'. Moreover, it may be noted that though a registered dealer has to be a person who carries on business of selling goods in the territory of Delhi, there is no requirement of law that a registered dealer must effect sales only in Delhi and not outside. There is nothing in the Act which prohibits a registered dealer from selling goods outside Delhi. If a registered dealer can effect sales outside Delhi, it is impossible to see how, by any stretch of reasoning, the words 'by him' can be pressed into service for the purpose of restricting 'resale' to that inside Delhi." The argument that the assessee must be held to have utilised the goods for a purpose different from that for which the goods were purchased, namely, resale by them, "fails to take into account the plain and obvious fact that when the branches of the assessees resell the goods outside Delhi, it is really the assessees who resell the goods, for the branches are not distinct and independent from the assessees but are merely establishments of the assessees. Resales effected by the branches a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on furnishing the declaration, fully satisfied the obligation by utilising them for packing of the goods for sale and for no other purpose. The question as to whether they have been so utilised by the same registered dealer or anybody else, becomes irrelevant, although in the present case they have been utilised by a person not different than the dealer himself. In this regard I may also usefully refer to section 6A of the Central Act which contemplates an exemption from the liability to pay tax under this Act in respect of any goods "on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, ............ and not by reason of sale ........... and in that case he has simply to discharge the burden of proving "that the movement of those goods was so occasioned". This section was added with effect from 1st April, 1973 and it clearly contemplates and makes it permissible for transfer of goods by a dealer from one State to another place of his business or even to his agent or principal, etc. The disputed transfers of packing materials by the company, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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