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TMI Blog2018 (11) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... made a false declaration, while issuing such Form-C. The revenue authority also did not dispute the fact that commodity of M-Seal is popularly sold at hardware stores - The reasoning of the Tribunal that the assessee should have always taken care while issuing Form-C and because such care was not taken, therefore, its conduct was not bonafide is too difficult to accept inasmuch as in the first place the test of care required to be taken care cannot be defined for the purpose of application in all cases involving wrong use of Form-C. Even if it is established that due care may not have been taken, it would not lead to an automatic or logical conclusion of false declaration or malafide intention. The test to be applied being one of false ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion certificate under the Act had been issued for small tools, hardware and Portable generating set only. Therefore, it was further reasoned that the commodity M-Seal being not a hardware item and not any other item specified in the registration certificate of the assessee, the assessee had made a false representation in using Form-C against import of M-Seal and therefore, he was liable to be penalized. 4. The assessee carried the matter in first appeal and that appeal came to be decided by order dated 12.05.2007. The first appellate authority reversed the finding of the assessing authority and deleted the penalty. According to the first appellate authority, the assessing officer had not found any basis to infer any intention on part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce only where a dealer acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct. Therefore, in proceedings for levy of penalty under Section 10-A of the Act, burden would be on the revenue to prove the existence of circumstances constituting the said offence. Furthermore, it is evident from the heading of Section 10A of the Act that for breach of any provision of the Act, constituting an offence under Section 10 of the Act, ordinary remedy is prosecution which may entail a sentence of imprisonment and the penalty under Section 10A of the Act is only in lieu of prosecution. In the light of the language employed in the Section and the nature of penalty contemplated therein, we find it difficult to hold that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n certificate itself established existence of false representation. He further referred to the finding of the Tribunal to the effect that it being obvious that the item was not covered in the registration certificate, the fact that the assessee had repeatedly issued Form-C, itself established to false claim. 10. Having heard learned counsel for the parties, it is seen that the governing principle to be applied in such cases is that laid down by the Supreme Court in the case of Commissioner of Sales Tax, U.P. Vs. M/s Sanjiv Fabrics (supra) noted above. Thus the penalty is imposable for deliberate defiance of law or upon guilty or contumacious or dishonest conduct. Also, the burden to establish such fact rests on the revenue. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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