TMI Blog1979 (7) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... rt and Export Association, Kota (hereinafter referred to as "the assessee"), was engaged in the business of dyeing raw wool and is a registered dealer under the Rajasthan Sales Tax Act, 1954, as well as under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act"). The assessee was permitted to purchase materials used for dyeing raw wool on C forms. The Commercial Taxes Officer, Circle A, Kota, who is the assessing authority in respect of the assessee (hereinafter referred to as "the assessing authority"), discovered that the materials imported by the assessee on C forms at the concessional rate of tax have been used by it not only for processing raw wool belonging to it but also for processing raw wool belonging to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as he fulfilled the necessary conditions and the materials purchased by him on C forms were used by him for the processing of goods meant for sale. It was admitted by the assessee that he undertook to process or dye raw wool for other dealers and charged them for the work of processing undertaken by him. The goods received by him from other dealers for processing were returned to the respective owners, after the processing of raw wool was completed, and even such goods were intended for sale. It was also urged on behalf of the assessee before the Board of Revenue that if the interpretation urged on his behalf in respect of the provisions of section 8(3)(b) of the Central Act may not be considered to be well-founded, yet there was reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity were not disposed of by the Board of Revenue within the statutory period of 180 days, the present applications under section 15(3A) of the Rajasthan Sales Tax Act have been presented before this Court by the assessing authority. The provisions of section 8(3)(b) of the Central Act, which are relevant for the purposes of these cases, are as under: "(3) The goods referred to in clause (b) of sub-section (1)-......... (b) ...............are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration of the registered dealer, which he could purchase on C forms, should be used by him, (2) such goods should be used for the manufacturing or processing of goods, and (3) the goods, for the manufacturing or processing of which the materials purchased on C forms are used, should be meant for sale or are sold. But there is no such condition that such goods should be sold by the assessee himself. In East India Cotton Manufacturing Company Pvt. Limited v. Assessing Authority-cum-Excise and Taxation Officer, Gurgaon[1972] 30 S.T.C. 489., a Division Bench of the Punjab and Haryana High Court held that "under the provisions of section 8(3)(b) of the Central Sales Tax Act, the goods purchased on C forms could be used in the manufacture or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation of the provisions of section 8(3)(b) of the Central Act, in respect of the question as to whether the goods which were subjected to manufacture or processing should belong to the assessee himself or may belong to him as well as to other persons, the assessee cannot be said to be unjustified in using the materials purchased on C forms for processing the goods belonging to other dealers meant for sale nor the conduct of the assessee in doing so could be held to be without reasonable excuse or mala fide. There is no doubt that the fact that two High Courts in the country have taken a view favourable to the assessee and there is no decision of this Court or the Supreme Court of India on the point, go to show that there was reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court that the liability to pay penalty does not arise merely upon proof of default in registering as a dealer, but an 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 dealer either acted deliberately in contravention of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of his obligations. As we have observed above, in the circumstances of the present case, it cannot be held that the assessee has acted deliberately in contravention of law without any reasonable excuse, in undertaking on job-basis the work of processing the goods belonging to other dealers meant for sale. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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