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2014 (8) TMI 892 - HC - VAT and Sales TaxPenalty under Section 10-A of the Central Sales Tax Act - petitioner had purchased machineries at concessional rate of tax by using Form-C when the petitioner does not have any liability of tax and was only involved in the execution of job work - Contravention of Section 10A - Non admission of any tax liability on the work done by it for NCL - Held that:- The impugned order indicates the reason for imposition of penalty, namely, that since the petitioner has not admitted any tax liability on the execution of the works contract, hence the petitioner has contravened the provisions of Section 10-A of the Act. Such reasoning is patently perverse and does not come within the parameters of imposition of penalty under clause (b), (c) and (d) of Section 10 of the Act. The learned standing counsel, however, submitted that penalty has been imposed under clause (d) of Section 10 of the Act, which stipulates that if a person after purchasing any goods for any of the purposes specified in clause (b), (c) or (d) of sub-Section (3) or sub-Section (6) of Section 8 fails without any reasonable excuse to make any use of goods for any such purpose in which case penalty under Section 10-A of the Act could be imposed. From a perusal of the counter affidavit that nothing has been indicated that the equipment so purchased was not in consonance with the declaration given in Form-B nor it has been disclosed that the equipments so purchased are not being used by the petitioner. Imposition of penalty was wholly illegal and without any basis. The reasoning mentioned in the impugned order is in gross violation of the provisions of Section 10-A of the Act. Consequently, the impugned orders imposing penalty cannot be sustained - Decided in favour of assessee.
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