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TMI Blog1989 (1) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Act, 1948"). The penalty was, therefore levied by him under sub-section (5) of section 4-B at the rate of 8 per cent at Rs. 1,92,000. The assessee went in appeal before the Deputy Commissioner, Sales Tax, against the order of the assessing authority, who not only dismissed the appeal but estimated the purchases being used in the job-work at Rs. 36,00,000 as against Rs. 24,00,000 estimated by the assessing authority and enhanced the penalty from Rs. 1,92,000 to Rs. 4,32,000. Then the dispute was carried to the Sales Tax Tribunal in second appeal. The Tribunal also affirmed the findings of the lower authorities that the purchases made against form III-B, without tax, were used by the assessee for the job-work and estimated such purchases at Rs. 16,00,000. This being so, the penalty was reduced by the Tribunal to Rs. 1,28,000. The Tribunal reached this conclusion observing that normal wastage shown by the assessee itself in this business in the earlier years was 18 per cent, but for the year 1981-82 the assessee claimed wastage at 42 per cent. Considering the opening stock, sales, closing stock, gross profit rate and the amount of the stock of paper, the Tribunal held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee at 42 per cent, the Tribunal found that the wastage in this type of business varied from 20 to 25 per cent. The submission of Sri Bharatji, learned counsel for the assessee, is that the sales and purchases having been accepted and opening stock and closing stock having not been disturbed by the authorities, there is no justification in not having accepted the wastage shown by the assessee. This submission is devoid of force. Sales and purchases may be accepted, opening stock and closing stock may not be disturbed, yet on the facts and circumstances of a given case, inference may be drawn that wastage claimed is excessive and the raw material has either been disposed of otherwise that is, other than in the manufacturing, or has been used in the job-work, if the assessee carries on such activity. When the wastage is not accepted, then the normal inference is that either the sales have been suppressed or the raw material has been used or disposed of otherwise. No doubt, in the instant case, sales have been accepted, but right from the inception, the wastage claimed by the assessee was found to be excessive. The sales and the receipt from job-work being unproportionate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the assessee has used the raw material acquired without tax against form III-B for a purpose other than that for which the recognition certificate was granted within the meaning of sub-section (5) of section 4-B. Clause (a) of sub-section (1) of section 4-B provides that if a dealer holds a recognition certificate issued under sub-section (2) in respect of the goods liable to tax under sub-section (1) of section 3-D or the goods purchased in circumstances in which such dealer is liable to pay purchase tax under section 3-AAAA, shall be liable in respect of those goods to tax either at the concessional rate or with full or partial exemption as may be notified in the Gazette. Sub-section (2) of section 4-B states that where a dealer requires any goods referred to in sub-section (1) for use in the manufacture by him in the State of any notified goods or in the packing of such notified goods manufactured or processed by it and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form or manner as may be prescribed for the grant of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods having been manufactured, but before the actual manufacturing, only the intention of the dealer to sell the notified goods will be relevant. The statute, in my view, cannot be interpreted to mean that there should be intention to sell the notified goods only at the time of applying for recognition certificate and later the fact whether such goods were sold by the dealer himself is immaterial. If such interpretation is accepted, then the use of the word "intended" in subsection (2) will become redundant. Then Sri Bharatji to support his contention relied on Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239 (SC). In this case, the Supreme Court interpreted section 8(3)(b) of the Central Sales Tax Act, 1956, which was then as follows: "8. (3) The goods referred to in clause (b) of sub-section (I)- (a) ........................ (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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