9911796707
TMI Blog1994 (11) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... le. They have been actually used for other purposes. C form No. Nature of goods Value 21-04-82 J/9 69057standard head acid transaction battery 19,481 06-08-82 J/9 702599directional dot matrix printed visual display unit 67,950 06-08-82 J/9 702600 HCL 8C/2 floppy driva dala 1,16,960 20-12-82 J/9 702784 Video screen 85,000 2,89,391 According to the Commercial Tax Officer, the dealers have purchased the goods not mentioned in the registration certificate by issuing the C form. This is an offence punishable under section 10(b) of the CST Act. It was therefore proposed to levy a penalty of Rs. 52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of C forms were computer parts which were not included in the registration certificate. The Tribunal's observation that mens rea should be established by the department to levy the penalty under section 10A of the Act is not correct in law. The assessee has not resold or used the goods in the manufacture of other goods for resale, but the goods purchased were used for other purposes only which warrants a penalty under section 10A of the CST Act. Having held that section 10A of the CST Act has been rightly invoked the Tribunal ought to have affirmed the penalty levied by the lower authorities. According to learned Additional Government Pleader (Taxes), if once it is known that the respondent herein has issued C forms with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y false representation and they had with bona fide belief issued the C forms. Therefore, the penalty is not leviable. Neither the Commercial Tax Officer nor the Appellate Assistant Commissioner gave a categorical finding that the respondent has made false representation. In the absence of such a finding, it is not possible to levy the penalty. The Revenue has not established mens rea to make out a case under section 10(b), (c) and (d) of the Act. There is no conscious disregard of law on the part of the respondent in submitting the C forms. It was therefore pleaded that the Appellate Tribunal was correct in deleting the penalty levied by the authorities below. 4.. We have heard the rival submissions. 5.. The point for consideration is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Mad.) it was pointed out that "for imposition of penalty, it is necessary to find that the act or omission of the assessee was intentional and whether mens rea was present". 7.. While considering what is bona fide representation, this Court in Coimbatore District Central Co-operative Supply and Marketing Society Ltd. v. State of Tamil Nadu [1980] 45 STC 21 (Mad.) held that "bona fide is not an expression of art but is a positive circumstance which has to be established by relevant and acceptable materials. The petitioner had not made a truthful representation which was an equation of a false representation and, in the circumstances of the case, the plea of bona fides set out by the petitioner for a lenient view was not a justifiable co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, the assessee herein submitted that they were under the bona fide impression that C forms can be issued to those goods which are incidental and ancillary to the business. The assessing authority held that "they are found guilty of offence under section 10(b) of the CST Act because the goods purchased by them against C forms are not covered by the certificates". The assessee is not using the computer in manufacturing and processing their goods. The assessee is not selling or reselling the computer in their business. In fact, the computer has no nexus to their manufacturing and processing activities. According to the assessee the computer is used to test the quality of their products after manufacture. Therefore computer is used not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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