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1981 (7) TMI 205 - SC - VAT and Sales TaxWhether the goods manufactured or processed by the registered dealer for a third party were intended for sale by such third party? Held that:- Appeal dismissed. The Division Bench of the High Court was right in holding that even if the assessee carried out the work of sizing, bleaching and dyeing of textiles for a third party on job-contract basis, its case would be covered by the terms of the second sub-clause of section 8(3)(b), provided that the textiles so sized, bleached and dyed by the assessee were intended for sale by such third party. If it is proved in any proceedings initiated under section 10(d) or section 10A that the textiles sized, bleached or dyed by the assessee for a third party on job-contract basis were not intended for sale by such third party, as would be evident if such textiles were in fact not sold by the third party but were used for its own purposes, the assessee would incur the penalty prescribed in those sections. Thus quash and set aside the notices which have been issued against the assessee on the basis that merely by using dyeing colours and other chemicals purchased by it in sizing, bleaching and dyeing textiles for third parties on job-contract basis, the assessee contravened the provisions of section 10, clause (d), and rendered itself liable to penalty under section 10A.
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