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TMI Blog2001 (3) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... ibit P3 communication has been issued by the first respondent demanding the petitioner to furnish additional security of rupees five lakhs, under section 7(3A) of the Central Sales Tax Act, 1956. It is stated that till 1993-94, they had collaboration with M/s. Parrys, that the sales tax exemption enjoyed had got exhausted during 1993-94 and the "C" forms already in possession by them had been misused for inter-State purchase. Penalty proceedings also were initiated and these circumstances justified demand for additional security amount. The objections of the petitioner were overruled and it is submitted that exhibit P5 proceedings were issued. 3.. As there was "nil" return, the petitioner submitted that the yardstick employed for callin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be in proportion to the tax payable or leviable under the Act and the petitioner was submitting nil returns from 1994 onwards, and assessments were accepted. 5.. The counter-affidavit filed by the Assistant Commissioner, refuted the contentions of the petitioner. From 1994-95 onwards, the petitioner was not having business activities as defined under the Kerala General Sales Tax Act and Central Sales Tax Act. Therefore, the use of "C" forms can only be treated as misuse of the facility, since at the time of supply of forms, column 7 of the application showed that business as manufacturing of sweets. In the light of change in the activities, the assessee was obliged to return the unused forms. Therefore, it is submitted that security i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Sales Tax (Registration and Turnover) Rules, 1957 on payment of a fee at the rate of rupees twelve per book of twenty-five forms and rupees forty per book of one hundred forms for furnishing it to the selling dealer. Before furnishing the declaration to the selling dealer the purchasing dealer, or any responsible person authorised by him in his behalf, shall fill in all required particulars in the form and shall also affix his signature in the space provided in the form for this purpose. Thereafter, the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked 'Original' and 'Duplicate' shall be made over by him to the selling dealer." Sub-rules (6) and (11) provide that unused dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel, or lubricants in the manufacture or processing of goods for sales. Taking cue from section 8(3)(b) if purchase is for generation or distribution of electricity, or any other form of power, there also such benefit becomes admissible. 10.. The essential distinction from the former, as from the latter is that such goods are purchased, for manufacture or processing of goods for sale. This stipulation is not obviously there in the matter of generation or for distribution of power. Therefore, the petitioner could have claimed the benefit of user of "C" forms only if it was simultaneously possible for them to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. Admittedly no tax was being levied as seen from the assessment orders produced. But one cannot forget the prescription made by section 7(3A). Though exhibit P5 does not specifically refer to this aspect, the submission made by the petitioner necessarily leads me to the above regions as well, since the decision will be incomplete without a discussion and decision on this point. Where "it appears necessary for an authority granting a certificate of registration for the proper realisation of tax payable or for proper custody and use of forms, he may at any time by an order in writing and for reasons recorded require the dealer to furnish security; for all or any of the aforesaid purpose." (section quoted deleting irrelevant portions). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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