TMI Blog1976 (1) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... motors and pistons were purchased by them issuing form XVII to the sellers and paying the concessional rate of sales tax. The taxable turnover determined by the assessing authority included the sales of air compressors and car washers in which they had used these motors and pistons, which they have purchased after issuing form XVII. With respect to these air compressors and car washers, the assessees claimed that they were not used with electrical energy and that they were interchangeable with oil-engine and petrol engines and that, therefore, they would not fall under item 41 of the First Schedule and that, therefore, that particular turnover would have to be assessed at multi-point tax. But the assessing authority held that these air com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer held that the turnover relating to the sale of air compressors and car washers would not fall under item 41 of the First Schedule and, accordingly, liable for multi-point tax. Thereafter, the assessing authority issued a notice under section 23 of the Tamil Nadu General Sales Tax Act in respect of the assessment years 1964-65 and 1968-69 proposing to levy penalty on the ground that the assessees had used the motors and pistons, which were purchased by them on issuing form XVII declaration, in the manufacture of goods which did not fall under any of the items mentioned in the First Schedule. The assessees were contending that section 23 was not applicable to them and that it would apply only if they had sold the motors and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed form obtained from the prescribed authority. Form XVII. which is the prescribed form, is as follows: "FORM XVII (See rule 22) Form of declaration Name and address of dealer to whom issued. Registration certificate number of the dealer to whom issued. Officer issuing the form Date of issue Seal of issuing authority. To (Seller) Certified that the goods specified in the First Schedule and detailed below, and ordered for in our purchase order No. dated purchased from you as per bill/cash memo. stated below supplied under your chalan No. are for use by me as component part of other goods specified in that schedule and detailed below, which I shall manufacture inside the State for sale and that I shall not sell the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XVII, set out above, contains two declarations or undertakings, one to the effect that the dealer who issued the declaration and purchased goods would use the goods purchased as component part of another goods specified in the First Schedule, which he manufactures inside the State for sale, and the other undertaking is that he shall not sell the goods purchased under the cover of that form as spare parts. According to the learned counsel, prosecution might be possible, under section 45(2) in respect of contravention of any one of these two conditions or both, but the levy of penalty under section 23 could be made only when the goods were sold by him as spare parts and not when they were consumed in the manufacture of goods not specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods if the goods had formed a part of another manufactured item. The use of the words "turnover" and "sale of such goods" in section 23 read with the words "if any person purchasing goods is guilty of an offence under clause (e) of sub-section (2) of section 45" clearly show that the section contemplates only a contravention of the declaration in form XVII by selling the goods purchased under the cover of the form as spare parts and not a case where it was used as a component part of some other goods, which is not specified in the First Schedule. The learned Government Pleader raises two contentions against this construction. Firstly, he referred to the words "sale of such goods" as not necessarily sale of the goods purchased in the for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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