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2014 (5) TMI 686 - HC - VAT and Sales TaxLevy of penalty – Whether the Tribunal was justified in passing order ignoring the inclusion of items in the Certificate of Registration immediately after passing the impugned order of assessment in accordance with G.O.Ms.No.61 CT & RE dated 24.01.1984 - Bona fide belief – Section 10(B) of CST Act - Held That:- Judgment in State of Tamil Nadu Vs. NU-Tread Tyres [2006 (7) TMI 578 - MADRAS HIGH COURT] followed - The use of the word "falsely" u/s 10(b) itself implies that the person making the representation knew that the certificate of registration does not cover that item, but knowing fully well that it is not, nevertheless contends that it is covered - What is required plainly u/s 10(B) is knowledge that the item is not covered by the certificate and the representation that it is covered by the certificate. The Revenue does not deny the fact that the items purchased by the assessee have a close link with the business activity of the assessee - The first Appellate Authority found out that the use of furnace oil, distribution pipes, copper cable, transformer and electrical goods are purchased to facilitate generating electricity and demineralising plant used in different processes have a bearing in the assessee's business - Therefore, read in the context of the enumerated Entries in the Registration Certificate and the items in question purchased established that assessee were under a bona fide impression that the enumerated Entries in the Registration Certificate would include the above items too - In view of instruction under Office letter D.Dis.Acts.Cell.IV/87729/84 dated 06.07.1984, that wherever a dealer had purchased goods on the basis of 'C' form without including them in the Certificate under the CST Act either inadvertently or out of ignorance, no penalty need be levied u/s 10-B - The assessee is entitled to succeed in this Tax Case Revision that in respect of enumerated items there can be no levy of penalty - However, aluminium sheets cannot be brought the enumerated entries, to contend that the assessee was under a bona fide belief that they would get included in the enumerated entries - In the circumstances, we reject the assessee's contention in respect of aluminium sheets - As far as the levy of penalty is concerned, we restrict the levy of penalty at 50% to purchase of aluminium sheets alone - Revision stands disposed of – Decided in partly in favour of assessee.
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