9911796707
TMI Blog2004 (5) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... binded printed materials and printed materials" allowing the company to purchase inter alia, the raw materials and consumable stores at a concessional rate under section 5(1)(bb) of the Act, 1941. The company purchased printing inks from registered dealers during the financial years ending March 31, 1993, march 31, 1994 and March 31, 1995 issuing declaration forms prescribed under the Bengal Sales Tax Rules, 1941 for availing the benefit of concessional rate of tax under section 5(1)(bb) of the Act, 1941. The proceeding for imposition of penalty under section 5A of the Act, 1941 was started against the petitioner on the allegation that the declaration forms were used unauthorisedly for the said financial years 1992-93, 1993-94 and 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1991 therefore, is bad in law and liable to be set aside. In support of his contention, the learned lawyer for the petitioner relied on the decisions reported in Jayshree Chemicals Ltd. v. Additional Commissioner of Sales Tax, Orissa [1992] 87 STC 359 (Orissa), Ipitata Sponge Iron Ltd. v. State of Orissa [1992] 85 STC 42 (Orissa), Braja Lal Banik v. State of Tripura [1990] 78 STC 283 (Gauhati), Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC) and Assessing Authoritycum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239 (SC). On behalf of the respondents, it is submitted that admittedly, the petitioner-company used printing inks for the purpose of printing, taxable printed materials in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -taxable goods and for the job-work, the principles laid down in the aforesaid cases are, therefore, applicable in the present facts and circumstances of the case. We, therefore, find it necessary to quote the relevant provisions of section 10 of the Central Sales Tax Act, 1956 vis-a-vis the provisions of section 5A of the Act, 1941. 10.. Penalties.-- If any person,-- (a) . . . (aa) . . . (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) or subsection (6) of section 8 fails, without reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In a case reported in Jayshree Chemicals Ltd. v. Additional Commissioner of Sales Tax, Orissa [1992] 87 STC 359 (Orissa), relied on behalf of the petitioner, the fact was that the petitioner purchased mercury for use in manufacturing process but ultimately resold the same. It was found that reselling was done on the ground that certain quantity was not required by him for the purposes of manufacturing. The registration certificate amended to include these articles for resale. Mens rea, therefore, was found to be absent since the dealer applied for amendment of its registration certificate. Hence, no penalty was imposed on mercury but regarding other goods, the order of penalty was sustained. In the case reported in Ipitata Sponge Iron Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds to justify the inference that the legislature clearly so intended". On the question of penalty the honourable Supreme Court held "the order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Commercial Taxes Officer, Circle A, Kota v. Foreign Import & Export Association [1980] 45 STC 265 was thus affirmed. But under section 5A, the goods have to be purchased for any of the purposes referred to in clauses (aa), (aaaa) and (bb) of sub-section (1) or sub-clause (ii) of clause (a) of sub-section (2) of section 5 of the Act, 1941 and the sub-section (1) of section 5 clearly says that the goods so purchased have to be used directly by the dealer in the manufacture of taxable goods. Hence, the dealer admittedly failed to use the goods directly for manufacturing his taxable goods though purchased at a concessional rate of taxes. He has given no reasonable explanation for that rather, he shifted his responsibility upon the concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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