TMI Blog1985 (7) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in setting aside the penalty of Rs. 25,000 imposed under section 16(1)(k) of the Rajasthan Sales Tax Act, 1954? " In view of section 13(10) of the Rajasthan Sales Tax (Amendment) Act, 1984 (No. XX of 1984) (hereinafter referred to as "the Amendment Act") which has come into force from 1st May, 1985 this application has been treated as a revision and heard as such under section 15 of the Act as substituted by the Amendment Act. Non-petitioner No. 1 M/s. Mohanlal Chiranji Lal, Srikaranpur, District Sriganganagar is a dealer registered under the Act. It purchased cotton in Rajasthan. It, however, did not pay the sales tax on the sale of cotton because the cotton was taxable at the last point and it purchased the cotton for resale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such cotton seeds outside the State could not arise, then it is not fair to hold that the non-petitioner misused the declaration by selling cotton seeds outside the State." A reference application was filed under section 15(1) of the Act for referring the aforesaid question, but it was rejected vide order dated 25th September, 1979. Here the application under section 15(2)(b) was filed on 2nd January, 1980 which, as stated above, has been treated as a revision, under section 15 of the Act as substituted by the Amendment Act. We have heard Mr. K.C. Bhandari, learned counsel for the assessing authority and Mr. Rajendra Mehta, learned counsel for the assessee-nonpetitioner. Section 16(1)(k) of the Act reads as under: "after purchasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods for the purpose of section 15(a) or (b) of the Central Sales Tax Act, 1956. In this connection, it was observed as under: "But so far as cotton seeds are concerned, it is difficult to accept the contention that the sale of cotton seeds must be treated as a sale of declared goods for the purpose of section 15(a) or (b) of the Central Sales Tax Act, 1956. It is true that cotton in its unginned state contains cotton seeds. But it is by a manufacturing process that the cotton and the seed are separated and it is not correct to say that the seeds so separated in cotton itself or part of the cotton. They are two distinct commercial goods though before the manufacturing process the seeds might have been a part of the cotton itself. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, justified in holding that the declaration has not been misused by the dealer-non-petitioner when the cotton seeds were sold outside the State. The assessing authority had imposed the penalty on the ground that the dealer-non-petitioner has misused the declaration made in form S.T. 17. We have already held that the ginned cotton and the cotton seeds are two different commodities. In this view of the matter, no valid exception can be taken to the order of the Division Bench of the Board dated 21st December, 1978, passed in revision. For the aforesaid reasons, we maintain the order dated 21st December, 1978 of the Board, set aside the penalty levied under section 16(1)(k) of the Act by the CTO and this application, which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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