TMI Blog1997 (8) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... f the certificate of registration in their favour purchased goods and materials for use in manufacture and processing of goods for sale. As a matter of fact, the dealers, it is said, not only used the goods and materials so purchased for use in manufacture or processing of goods for sale by them, but also used the goods and materials so purchased for job-work of third parties or manufacturers for sale relatable to motion films. 3.. The Commercial Tax Officer, T. Nagar (North) Assessment Circle, finding that the use of goods and materials covered by the certificate of registration for job-work done to others or manufacturers for sale is violation of the condition of the certificate of registration, issued a notice dated May 28, 1981 requiring the dealers to show cause as to why penalty proceedings should not be initiated for infraction or violation of the relevant clause of section 10, under section 10-A of the CST Act, in lieu of prosecution and requiring them to file objections, if any, to the proposal for initiation of the penalty proceedings quantifying the penalty in a sum of Rs. 45,036, calculated at 15 per cent on the purchase of the materials and goods on the basis of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whether the entire purchases were used only in works contract or whether as contended by the learned authorised representative, there were sales by others in which case as held by the Supreme Court decision cited by the learned authorised representative there can be no offence. We have no definite information as to what extent there has been misuse of the C forms and what should be the correct amount of penalty that should have been imposed. So it is not possible for us to totally accept the enhancement petition filed by the State representative. At best it can be deemed as an escapement which has to be set right by the assessing officer himself. The enhancement petition is dismissed. (b) After recording a finding as above, the Tribunal recorded the operative portion of the order, which is getting reflected as below: 10. In fine we hold that there was no mistake in the certificate of registration issued. It has however to be found out as to what extent there had been misuse of the goods purchased against the C forms. If there had been any sale of the processed goods either by the appellants or by somebody else, to that extent they may not liable for any penalty at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods purchased partly in manufacturing its own goods for sale and partly for doing job-work for other parties, and that the job-work did not constitute sale and therefore the respondent had contravened section 10 of the Act. (d) A writ petition filed by the respondent to have the notices quashed was dismissed by a single Judge of the High Court, but allowed by a Division Bench. (e) On appeal by the Assessing Authorities the Supreme Court held, affirming the decision of the Division Bench of the High Court that section 8(3)(b) would clearly cover a case where a registered dealer manufactured or processed goods for a third party on a job-contract and used in the manufacture or processing of such goods, materials purchased by him against his certificate of registration and the declarations in form C , so long as the manufactured or processed goods were intended for sale by such third party. (f) The expression used by the Legislature as well as the rule-making authority was simply, for use.......in the manufacture..........of goods for sale without any addition of words indicating that the sale must be by any particular individual. The Legislature had designedly ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third parties, on job-work basis. When the goods and materials so purchased had been used by the assessee-dealers, as had been found by the taxing authorities, puzzling it is for us, to understand as to how the order of assessment, as has been made by the Tribunal, is sustainable, on the facts and in the circumstances of the case, when especially, on the face of the decision rendered by the apex Court of this country in the case of East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239. The dictates of common sense would point out that motion films made are only for the purpose of exhibition, by way of sale. For the sake of emphasis, we may again reiterate that the assessee-dealers were found fault with by the taxing authorities for the use of the goods and materials covered by their certificate of registration, in the processing of motion films to third parties on job-work basis. The user of the goods and materials so purchased for such user, as has been found by the taxing authorities, on the face of the decision of the East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239, rendered by the Supreme Court cannot at all be stated to be an infraction or violation of any of the relevant clause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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