1989 (7) TMI 327

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..... under section 4-B, purchased paddy for manufacture of rice, which was wholly exempted from tax. Sub-section (6) of section 4-B says that where a dealer in contravention of the terms and conditions laid down in sub-section (2) sells or otherwise disposes of the notified goods or the raw materials, of which he has been granted such certificate, he shall be liable to pay as penalty such amount as th .....

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..... ravention of the provisions of section 4-B, inasmuch as consignment sales had been made and, therefore, penalty proceedings were initiated against the assessee and vide order dated 29th July, 1985, the assessing officer levied the penalty equivalent to the tax payable on purchase price. Later, the assessing officer took the view that there was a mistake apparent on the record in levying the penalt .....

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..... rned counsel for the assessee drew my attention to the circular No. 85 dated 10th November, 1982, which gives two options. The first option is that while levying penalty under sub-section (6) of section 4-B, the quantum of penalty will be equivalent to the purchase tax avoided on the purchases. During the proceedings under section 22, the assessee relied on the said circular. The question is whe .....

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