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TMI Blog2025 (3) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... y GSR no.1059 dated 29th October, 1958. 'Plant' became an independent item. It is to be seen whether, for purpose of generation of electricity there is necessity of a plant and if so, construction of it by use of, inter alia, cement. Petitioner's contention is, the plant was constructed after the registration certificate was obtained, on goods purchased by declaration on Form-C. There does not appear to be any dispute that petitioner did construct a plant, from where it commenced its generation of electricity - There is also no indication from materials on record that after construction of the plant, cement had been purchased by declaration in Form-C. Cement was an item subsequently added in the registration certificate. It is absurd to expect cement will be directly used for purpose of generation or distribution of electricity. Penalties for alleged misuse of registration certificates and misrepresentation in purchasing goods - HELD THAT:- Where there is a finding of guilt to impose penalty, the authority is obliged to show that if the items purchased on declaration by 'C-Form', are present in the premises where petitioner is generating electricity for distribution, there is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on rule 13 in Central Sales Tax (Registration and Turnover) Rules, 1957. The goods dealt with under the charge are several, of which some have been accepted. The authority did not accept most of the goods as covered by rule 13 and found petitioner to be guilty of the charge, in respect of them. The authority is deemed to have found on facts. We are on judicial review of such findings. Parties are to demonstrate that findings in respect of goods not accepted were shown in impugned order to have been used for either transformation or transmission of electricity. Opinion of or on necessity of user for generation of electricity will not do. 4. Moving on to charge no. 5 it is seen that an analysis of categories of goods mentioned in the certificate including subsequent addition of cement in relation to annexure-5 (mentioned in the charge), is necessary. We see that some of the goods coming under charge no. 5 have been referred as dealt with under charge no. 3. Here we make clear that if an item of goods is covered under charge no. 3, it cannot be subject matter of charge no. 5 as 'not covered'. Our this observation is to direct attention of the parties for adjudication of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity. Referring to said second certificate of registration he points out, it also includes transmission and distribution of electricity as mentioned therein. The judgment was not interfered with by the Supreme Court on revenue having filed for special leave to appeal. There can be no contention raised, to be entertained, regarding generation, distribution and transmission of electricity as done by his client. 4. He submits, in the chart (dealing with charge 5) column 4 gives extract of reasoning relevant to article/equipment mentioned as several items in it. The reasons given stand in face of the provision invoked. They are clause (b) under sub-section (3) in section 8 and clauses (b) and (d) under section 10. Application of penalty under section 10A, made by the officer, was misconceived. It will be sufficient for us to reproduce below clause (b) in sub-section (3) of section 8. xxx xxx xxx 5. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue. He will be heard on adjourned date. Revenue is put on notice that under charge 5, regarding goods purchased as are outside the registration certificate, the only item of goods is cement. Petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available at 1990 SCC OnLine Ori 23, paragraph 10 (SCC OnLine print). The paragraph is reproduced below. "10. There is substance in the submissions of the counsel for the opposite parties. Rule 13 clearly excluded cement, steel, etc., from the category of goods intended for use for manufacture or processing of goods. The petitioner, therefore, committed infraction of section 10 (d) of the Central Sales Tax Act thereby attracting section 10A providing for imposition of penalty. But, in our view, there exists an extenuating factor which should go to lessen the burden of the petitioner. The conduct of the Revenue has not been free from blame. Goods, which are not used in the manufacture or processing of goods, were specified in the certificate of registration. The heading at the top of the list of goods was inappropriate. Therefore, having given our anxious consideration to the matter, we hold that the amount of penalty shall equal the amount. Which the petitioner would have paid otherwise on the goods had it not purchased the same at a concessional rate 9tilizing "C" forms, minus the amount already paid by it as tax thereon. The value of the goods for the purpose of imposition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced below. "We have considered the submissions and the point of contradiction or difference or the point of view which has been taken by the petitioner-assessee and the Department. While considering the matter, one thing we have to consider is that whether the machineries which are used are mandatory or optional for manufacturing process so that the same can be taken into consideration while granting the sales tax benefit. It is to be seen whether the same is essential to be done for the purpose of speedy or more production of the electricity or the same could have been avoided in production or in the manufacturing process. In that view of the matter, while considering the matter the authority who is deciding the matter has to consider the same for the purpose of taxing statute. While considering the production of electricity, to achieve higher production, an expert of electricity might think that this is mandatory or it is necessary for higher production. But while interpreting the provisions of the use and expenses, which are shown for taxation purpose, mandatory or not is to be judged by the expert and in our considered opinion, while dealing with the same, the Revenue auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods... .... ...." (emphasis supplied) This finding must be seen in context of facts in that case because in the paragraph itself the Supreme Court said, whether a building is 'plant' within the meaning of rule 13 is a difficult question, on which no opinion need be expressed. The facts were, the deletions made were in respect of items said as not necessary for use in the manufacture of tiles. It follows, we must accept reliance of petitioner on the declarations of law made in paragraphs 8 and 10 in the judgment, as have been reproduced above, for our instruction. 10. In Ipitata Sponge Iron Ltd. (supra) the registration certificate issued to appellant therein did not include 'refractory'. Revenue had moved against appellant therein. In that context coordinate Bench had considered mitigation following finding on conduct of revenue as had not been free from blame. The view does not come to aid of revenue. 11. Challenge in the writ petition involves provisions in sections 8 and 10 of Central Sales Tax Act, 1956. Clause (b) under sub-section (3) of section 8 is reproduced below. "8. Rates of tax on sales in the course of inter-State trade or commerce.-... ... ... ....... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here does not appear to be any dispute that petitioner did construct a plant, from where it commenced its generation of electricity. That being the position, we find the view taken, of cement not answering to the requirement of the provisions as being neither a raw material nor processing material nor machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants essential for purpose of generation or distribution of electricity, unacceptable. There is also no indication from materials on record that after construction of the plant, cement had been purchased by declaration in Form-C. Cement was an item subsequently added in the registration certificate. It is absurd to expect cement will be directly used for purpose of generation or distribution of electricity. 13. Moving on to reasoning by the revisional authority in respect of steel, we find the authority implied its disagreement with issuance of the registration certification including item steel in saying, it was issued rightly or wrongly from Bhubaneswar-I and II circles to go on to say, fact remains steel is not an item essential based on reasoning earlier given for cement. We are unable to accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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