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TMI Blog2003 (11) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... t was found that the dealer had issued form C for the purchases of oil-seeds from outside the State of U.P. and availed the benefit of concessional rate of tax in respect of which it was not registered as per the registration certificate, and accordingly, notice under section 10-A read with section 10(b) was issued. Dealer filed the reply to the show cause notice which was not accepted and a sum of Rs. 73,298.60, was levied towards penalty for the assessment year 1985-86 and a sum of Rs. 2,08,064 for the assessment year 1986-87. Dealer filed appeals before the Deputy Commissioner (Appeals). The first appellate authority had allowed the appeal in part for the assessment year 1985-86 and reduced the quantum of penalty to Rs. 1,075 and rejected the appeal for the assessment year 1986-87. Being aggrieved by the order, the applicant filed two appeals before the Tribunal which were allowed and penalty were deleted. Being aggrieved by the order of Tribunal, present two revisions have been filed. 3.. I have heard Sri B.K. Pandey, learned Standing Counsel and Sri Bharat Ji Agarwal, learned Senior Advocate appearing on behalf of the respondent. 4.. Tribunal held as follows: "Para 4. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea is permanently absent and from the record on file, it does not stand establish that form C were issued under the false representation. The department should be diligent enough to use the genuineness and legality of issuance of forms, but in the present case, the department itself has been negligent to issue form C without any objection for purchase of oil seeds, which resulted into the bona fide belief of the appellant that he was authorised to purchase oil seeds against form C. The case of the appellant was that he genuinely believed that oil seeds was also covered by its registration because form C were being regularly issued by the department for the said purpose without any objection. Under these circumstances, the appellant in the present case does not appear to act in deliberate deviation or disregard of the provisions of the Act. When there is no deliberate violation of the provisions of law, the penalty imposed against the assessee is liable to be quashed. For this view, we stand fortified with the case law referred to by the learned counsel in the case of Sri Lakshmi Machine Works v. State of Madras [1973] 32 STC 407 (Mad.) and State of Rajasthan v. Jaipur Udyog Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was granted for "oil seed" in the registration certificate. He submitted that the registration certificate was duly served on the dealer to which no objection was raised. On the part of the applicant, i.e., no application was moved that oil seed was left to be written in the registration certificate. He submitted that though the dealer was aware that he was not registered for oil seed still used form C in making the purchase of oil seed which amount to false representation on the part of the dealer. He further submitted that since dealer was registered therefore, entitled to get form C and accordingly, the assessing authority had issued the form C on its application. He submitted that though there is nothing to show that before issue of form C earlier details about its use were looked into but even if it is presumed that it was seen still for the laches on the part of the assessing authority, dealer could not get right to issue form C while making the purchases of oil seed when dealer was aware that firm was not registered for oil seed. He submitted that the Tribunal has illegally cancelled the penalty. 6.. He submitted that for the levy of penalty under section 10(b) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m May 22, 1990. In support of contention that on the facts and circumstances penalty is not leviable he relied on the decision of the honourable Supreme Court reported in [1972] 30 STC 565; AIR 1973 SC 843 (State of Rajasthan v. Jaipur Udyog Ltd.) and Commissioner of Sales Tax, U.P., Lucknow v. Kashi Prasad Ram Chandra Lal reported in [2001] 122 STC 567 (All.); 2001 UPTC 173. In the case of Sanjiv Fabrics v. Commissioner of Sales Tax reported in [2004] 137 STC 563 (All.); 2003 UPTC 1081. I have perused the order of Tribunal and authorities below. 8.. Section 10(b) read as follows: "If any person,being a registered dealer falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration." 9.. It is true that false representation means "something done knowingly having knowledge". If anything is done bona fidely then such act cannot be said to be a false representation. Therefore, the question for consideration is whether on the existing fact, stated above, the dealer-opposite party while making the purchases of oil seed made the false representation that it was registered for oil seed, in other words, whether while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not entitled. In the present case, there is remotely no reason which led to the dealer to believe that it was registered for oil seed under the Central Sales Tax Act and was entitled to issue form C. There may be cases where the dealer is registered for some item and the belief may be that the item for which form C was issued was covered under such item and in that situation one can understand about bona fide belief case. Where the dealer admittedly has neither applied for registration for oil seed nor registration was issued for oil seed, it is difficult to accept a plea of bona fide. 11.. Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 contemplates form C to avail the benefit of concessional rate of tax as required under section 8 of the Central Sales Tax Act, 1956. It is relevant to refer the language of form C: ORIGINAL The Central Sales Tax (Registration and Turnover) Rules, 1957 Form C Form of declaration See rule 12(1) Name of issuing State: .................................... Office of issue: .................................... Date of issue: .................................... Name of the purchasing dealer to whom is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the registration certificate oil-seed was mentioned, there was absolute no reason for dealer to issue form C for oil seed after making false declaration. The issuance of form C for oil seed was patently amounts to false declaration. 13.. Let us now examine the cases relied upon by the learned counsel for the applicant. 14.. In the case of State of Rajasthan v. Jaipur Udyog Limited reported in [1972] 30 STC 565 (SC), honourable Supreme Court had an occasion to consider section 10(b) read with section 10-A of the Central Sales Tax Act, 1956. In that case dealer was registered for machinery and has issued form C for purchase of earth moving machinery comprising bulldozers, dumpers and tipping wagons, paying the preferential rate of tax. Assessing authority levied penalty on the ground that in respect of the aforesaid goods, dealer was not entitled for the benefit of preferential rate. The levy of penalty was confirmed up to the stage of Board of Revenue. In reference, the division Bench of Rajasthan High Court held that in respect of the above goods, dealer was entitled to preferential rate. Matter went to honourable Supreme Court. Honourable Supreme Court held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be mentioned here that the word Kerana is a wide word and includes several items. Normally Gari Gola sold by the assessee has not been treated as oil seed by the consumer but as an item of Kerana. The findings which have been recorded by the Tribunal on the basis of appraisal of evidence and material on record are pure findings of fact; section 10(b) of the Central Sales Tax Act, 1956 provides of levy of penalty if any person being registered dealer falsely represents when purchasing any class of goods that goods of such class are covered by a certificate of registration: thus for levying penalty under section 10(b) of the Act, the dealer should falsely represent that the goods are covered by the certificate of registration. The word falsely implies deliberate act which has been done knowingly. In the present case the findings recorded by the Tribunal are that the assessee-opposite party had not deliberately given any false representation while purchasing goods. Thus, the penal provision under section 10(b) of the Act was not at all attracted. The revisions lack merit and are dismissed." 16. It is stated that the aforesaid cases relied upon by the learned counsel for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STC 103 (Ker), dealer was registered for Coca Cola, Fanta orange and Fanta soda while the form C was issued for purchase of bottle coolers. A penalty was levied under section 10-A read with section 10(b) of the Central Sales Tax Act, 1956 which was upheld by the division Bench of the Kerala High Court on the ground that the dealer was not registered for bottle coolers and made a false representation while issuing form C. 20.. In the case of Commissioner of Sales Tax v. Misra Modern Rice Mills, Gorakhpur reported in 2003 NTN 713, the dealer was not registered for machinery but has issued form C for purchase of machinery. Penalty under section 10-A read with section 10(b) was levied on the ground that dealer was not registered for machinery. Tribunal has deleted penalty on the ground that at the time of taking registration in statement on oath it was stated that it requires form C and 31 for machinery. This Court held that such statement made at the time of taking registration, did not amount to bona fide belief. It has been held that the dealer had neither applied for registration for machinery nor in the registration certificate, machine was mentioned and therefore, it could n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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