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TMI Blog2008 (2) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities shall afford reasonable opportunity of being heard to the petitioner as contemplated in section 10A of the CST Act. W.P. allowed. - - - - - Dated:- 7-2-2008 - GANGULY A.K. C.J. AND MAHAPATRA B.N. , JJ. The judgment of the court was delivered by B.N. MAHAPATRA J. In this writ petition the petitioner challenges the revisional order dated March 13, 1992 passed by the Additional Commissioner of Sales Tax, Orissa (hereinafter called as, the revisional authority ) in Revision Case No. SA. 517/91-92, confirming the order dated October 30, 1989 passed by the Sales Tax Officer (hereinafter called as the STO ), Sambalpur III Circle, Jharsuguda, imposing penalty of Rs. 37,00,000 under section 10A of the Central Sales Tax Act, 1956 (hereinafter referred to as, the CST Act ). In nutshell, the background facts which are relevant for the purpose of dealing with this writ petition are as follows: The petitioner is a company incorporated under the Companies Act, 1956 having its registered office at Seepat Road, Bilaspur in the State of Madhya Pradesh and is a subsidiary of Coal India, Ltd. It has a unit in Brajarajnagar in the district of Sambalpur (Orissa) and it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the dealer after purchasing the goods for any of the purposes specified in clause (b) or clause (c) or clause (d) of sub-section (3) of section 8 failed without reasonable excuse to make use of the goods for any such purpose and thereby committed the offence coming within the scope of sub-section (d) of section 10 of the CST Act. Being aggrieved by the order dated October 30, 1989 passed by the STO under section 10A of the CST Act, the petitioner preferred a revision under section 23(4) of the OST, Act read with rule 22 of the CST (Orissa) Rules, before the Commissioner of Sales Tax. In the said revision, the revisional authority by order dated March 13, 1992 confirmed the order of imposition of penalty of Rs. 37,00,000 passed by the STO holding that the petitioner was guilty of the offence under clause (d) of section 10 of the CST Act. The learned counsel appearing on behalf of the petitioner vehemently argued that both the STO and the revisional authority have committed serious error of law by not issuing notice to the petitioner to show cause in respect of commission of offence alleged under section 10(d) of the CST Act before imposing penalty under section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice issued to the petitioner did not contemplate an allegation that the petitioner being a registered dealer had falsely represented when purchasing any class of goods that goods of such class were covered by it's certificate of registration. He emphasised that show cause notice was in fact issued by the STO to the petitioner for committing an offence under clause (d) of section 10 of the CST Act. He further argued that that in response to the show cause notice the petitioner appeared before the STO and submitted written explanation. In the said explanation, the petitioner explained how those purchased goods were used by it. The STO, after verifying the books of account and connected records passed a reasoned order on October 30, 1989 holding that the petitioner after purchasing the goods for the purpose specified in clause (b) of section 8(3) failed without reasonable excuse to make use of the goods for such purpose and thereby was guilty of offence under clause (d) of section 10 of the CST Act. He further argued that the STO has rightly applied the ratio of the judgment of the honourable High Court of Madhya Pradesh in the case of Indra Singh Sons Private Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; or (c) . . . (d) after purchasing any goods for any of the purposes specified in clause (b) or clause (c) or clause (d) of sub-section (3) of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose; (e) . . . (f) . . . he shall be punishable with simple imprisonment which may extend to six months, or with fine, or with both; and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues. 10A. Imposition of penalty in lieu of prosecution. (1) If any person purchasing goods is guilty of an offence under clause (b), or clause (c), or clause (d) of section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax which would have been levied under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued under the CST Act. It should be meant as specified for the purpose of sub-sections (1), (3) and (4) of section 8 of the CST Act and should not be misunderstood as being the word mentioned . Learned counsel for the Revenue tried a lot to impress upon this court that the impugned show cause notice was issued by the STO requiring the petitioner to show cause as to why penalty should not be imposed on the petitioner as it was guilty of an offence under the provisions of section 10(d) of the CST Act. We are unable to accept this contention of the learned counsel appearing on behalf of the Revenue. In the entire show cause notice, there is no mention of sub-sections (1), (3) and (4) of section 8 of the CST Act. It goes without saying that a show cause notice which is issued seeking a reply from the dealer before imposing penalty on him for breach of any statutory provision must be in unambiguous and clear language. It should not be worded in such a manner that one shall be required to derive a clear idea of the case which he has to answer. If there is anything in the mind of any authority issuing show cause notice the same should be translated in clear words and must find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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