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Form 'C'

VAT and Sales Tax - Started By: - Avinash Jain - Dated:- 10-4-2015 Last Replied Date:- 10-4-2015 - We are a 100% EOU based in Bangalore established in 2006. We intend to procure a Goods Transport Vehicle for transportation of our finished goods to the sea port. Our prices being FOB, Sea Port, this transportation is therefore part of the process of sale. Would we be eligible to avail of Sales Tax concession by issue of if we make an interstate purchase of the GTV? Our RC issued by the Sales T .....

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) are directed against the order of Tribunal dated 24.12.1998 relating to the assessment years 1981-82, 82-83, 83-84, 86-87 and 87-88 under Central Sales Tax Act. 2. Applicant is a company incorporated under the Indian Companies Act, 1956, engaged in the business of petroleum product etc. Applicant was issued registration certificate under Section 7(1) and 7(2) of Central Sales Tax Act in Form B . Initially certificate was issued on 24.04.1962 w.e.f. 26.03.1962 In the certificate following items .....

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rs, voltage establishes, transformer with related accessories. 2. Steel pipe, steel plate, steel reinforcement bars. 3. Insulators and seals, vent pipe, top and bottom ends. 4. Coalatar enamels. 5. Coaltar primer. 6. Fibre Glass. 7. Kraft paper. 8. PVC Tape. 9. Cathodie Protection Materials. 10. Oil and buch. 11. Control instruments. 12. Tale control and tale communication equipments. 5. In the aforesaid certificate w.e.f. 09.03.1973, the following items have been added: Laboratory equipment, im .....

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nd fixtures, (7) Office equipment, (8) Electrical goods, (9) Air conditioners, (10) Raw materials, (II) Chemicals and additives, (12) Spare and accessories, (13) Consumable stores, (14) Lubricant and greases. 7. In the aforesaid certificate w.e.f. 22.03.1977, the following items have been added: (1) Hydraulic Brake Fluid, (2) Manthonol Mixture 8. In the aforesaid certificate w.e.f 11.05.1982, the following items have been added. 1. STYLE OF BUSINESS: Govt. of India undertaking in the business of .....

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F GOODS FOR SALE (FOR LPG PLANTS) LPG Filling Machines, NOZZLES, Pump Sets, Compressor valve. 4. FOR PACKING OF GOODS Containers, Accessories and component of containers steel sheet and plates for fabrication of containers. 9. During the years under consideration, applicant had purchased LPG Cylinder, Safety Boots, Wooden Sleeper, Mica Brick, Ladder, RCC Pipe. Kambal (Blanket), Vessels, Cement, Yarn, Trailer, Hospital Equipment, Transmitter, Fire Fighting Pump, Cement Paint, Film. G.I. Wireness, .....

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entation. 10. The details of the items purchased and are claimed to have been covered under the items mentioned in the registration certificate are as follows: ITEMS ASSESSMENT YEAR COVERED INREGISTRATIONCERTIFICATE UNDER 1981-82 1982-83 L.P.G. CYLINDERS 8847786 690837 EMPTY PACKAGESSAFETY BOOTS 315280 254101 CONSUMABLE STORES WOODEN SLEEPER 4311717 CONSUMABLE STORES MICA BRICK 811676 CONSUMABLELADDER 59550 FITTING and FIXTURESR.C.C. PIPE 223200 83290 FITTING and FIXTURESK AMBALI BLANKE PROTECTI .....

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ORES RASSI 3763 480 CONSUMABLE STORES AGUIGAY 104000 CONSUMABLE STORES PULLER EARTH 16800 85015 CONSUMABLE STORES ALUMINIUM 944 SPARES and ACCESSORIES 402122 187470 11. Assessing authority had not accepted the plea of the applicant and levied the penalty under Section 10-A of the Act. First appeals filed by the applicant were dismissed. Applicant filed second appeals before the Tribunal, which too have been dismissed by the impugned order. 12. Heard Sri Bharatji Agrawal, learned Senior Advocate, .....

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of false representation. He submitted that unless a case of false representation is made out, penalty under Section 10-A of the Act was not leviable. In support of his contention he relied upon the following decisions: 1. J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. The Sales Tax Officer, Kanpur and Anr. reported in 16 STC 563 2. Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar and Ors., reported in 16 STC 259. 3. State of Rajasthan v. Jaipur Udyog Limited, reporte .....

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t the LPG cylinder was added in the registration certificate w.e.f. 12.08.1982 and prior to the 1208 1082 neither empty packages nor LPG cylinders were mentioned and, therefore, applicant had made false representation while issuing the Form C in respect of LPG cylinder for which it was not registered. He further submitted that the applicant is not able to show that how the aforesaid items are required for use in the manufacturing. Thus, while issuing the Form C false representation was made. In .....

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at the LPG gas cylinder is not required for use in the manufacturing, in as much as it is used for filling of gas after the manufacturing. 2. Safety Boots. - It is claimed to be covered under the consumable stores. It is stated that it is used by the employees while filling tank in lorry and also dipping and for its measurement. 3. Wooden Sleeper. - It is used in keeping the goods. 4. Mica Brick - It is used for floor making. 5. Ladder - It is used for filling of petroleum products. 6. R.C.C. Pi .....

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icle. 12. Hospital Equipment - It is used as hospital equipments and is covered under consumable stores. 13. Transmitter - It is used for measurement while filling the petroleum product in tanks and lorry. 14. Fire Fighting Pump - It is used for safety. It is covered under the consumable stores. 15. Cement Paint - It is used for painting of building filling shades etc. It is covered under consumable stores. 16. Film - It is X-ray films. It is used for the testing of pipe line. It is covered unde .....

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. It is used for extinguishing of fire. It is consumable stores. 23. Puller Earth - It is used for providing earthing to the electric connection. It is consumable stores. 24. Welding Pipe Fitting - It is used for giving bend to pipe line. It is covered under fitting and fixing. 25. Electrode - It is used for welding of pipe. It is covered under consumable stores. 26. Aluminium - It is used for covering of fire fighting equipment. It is consumable stores. 27. Bearing - It is used in the pump and .....

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10(b) of the Central Sales Tax reads as follows: Penalties If any person (a) ... (b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; of 18. Section 8(3)(b) and Rules 13 reads as follows: Section 8. Rates of tax on sales in the course of inter-State trade or commerce (3) The goods referred to in Clause (b) of Sub-section (1)- (b)...are goods of the class or classes specified in the certificat .....

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ls, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants, in the manufacture or processing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power. 19. Contents of declaration in Form C' are as follows: The Central Sales Tax (Registration and Turnover) Rules, 1957 Form-'C' Form of Declaration [See Rule 12(1)] Name of issuing State.... Office of issue.... Date of issue.... .....

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e/processing of goods for sale.... use in mining use in generation/distribution of power packing of goods for sale/resale and are covered by my/our registration certificate No....dated....issued under the Central Sales Tax Act, 1956 () (It is further certified that I/We an/are not registered under Section 7 of the said Act in the State of....in which the goods covered by this form are/will be delivered}. Name and address of the purchasing dealer in full.... Date.... (2) (The above statements are .....

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ealer). 20. Let us examine the cases cited by the learned Counsel for the parties 21. In the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. The Sales Tax Officer, Kanpur and Anr., reported in 16 STC, 563, Apex court held as follows: In our judgment if a process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the pro .....

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nufacturer) fell within Rule 13, even if the vehicles were used merely for removing ore from the mine to the factory, and finished goods from the factory to the place of storage. Spare parts and accessories required for the effective operation of those vehicles were also held to fall within Rule 13. (See Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar and Ors.). 22. In this case goods used in the process of designing has been held to have been used in the manufacturing .....

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ssed. But to qualify for specification under Section 8(3) (b) goods must be intended for use of the nature mentioned in Rule 13, in the manufacture of goods. Building materials used as raw materials for construction of plant cannot be said to be used as plant in the manufacture of goods. The Legislature has contemplated that the goods to qualify under Section 8(3)(b) must be intended for use as raw materials or as plant, or as equipment in the manufacture or processing of goods, and it cannot be .....

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electrical equipment would in the modern conditions of technological development normally be regarded as equipment necessary to effectually carry on the manufacturing process. We are not prepared to agree with the High Court that in order that electrical equipment should fall within the terms of Rule 13, it must be a commodity which is used in the creation of goods. If, having regard to normal conditions prevalent in the industry, production of the finished goods would be difficult without the .....

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Commercial Taxes, Bihar and Ors. reported in 16 STC, 259. The assessee mined copper and iron ore from its own mines, transported the ore to its factory and manufactured finished products from the ore for sale. The assessee had for the purpose of its business to purchase diverse categories of goods from outside the State. Some of those goods were used in its factory in the process of manufacture and in the copper and kyanite mines; other goods were purchased for use in its offices, factory and mi .....

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ubes for motor-vehicles; and (vii) cane baskets. The High Court held that the assessee was entitled to include only the following goods in the certificate of registration:- (a) Locomotives and motor-vehicles actually used in carrying and removing raw materials during the process of manufacture; (b) locomotives and motor-vehicles used both underground and on surface during mining operations; (c) accessories and spare pails for such locomotives and such motor-vehicles; (d) tyres and tubes for such .....

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ore and other raw materials in the mining operations and in the process of manufacture for sale and cane baskets out of item (vii) used for carrying ore and other materials used in the course of manufacture, should be specified in the certificate of registration Household, hospital equipment with furnishings and fittings [part of item (iii) J, medical supplies [item (iv), stationery [item (v)] and cane baskets used for collecting refuse to protect the health and cleanliness in the colony of work .....

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sing of goods for sale' may ordinarily include such vehicles as are intended to be used for removal of processed goods form the factory to the place of storage. The mere fact that there is a statutory obligation imposed upon the owner of the factory or the mine to maintain hospital facilities would not supply a connection between the goods and the manufacturing or processing of goods or the mining operations so as to make them goods intended for use in those operations. The expression intend .....

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ng Wagons, paying the preferential rate of tax. Assessing Authority levied penalty on the ground that in respect of the aforesaid goods, dealer was not entitled for the benefit of preferential rate. The levy of penalty was confirmed up to the stage of Board of Revenue. In reference, the Division Bench of Rajasthan High Court held that in respect of the above goods, dealer was entitled to preferential rate Matter went to Hon'ble Supreme Court. Hon'ble Supreme Court held as follows: Now th .....

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Assuming, without deciding, that the view taken by them is incorrect even then it is impossible to say under the circumstances of the case that the respondent was guilty of making any false representation. The view of the law, which he is contending for is supported by the view taken by two judges of the High Court and one Member of the Board of Revenue. Hence, we fails to see how such a view of the law can be taken as false representation. 25. In the case of Commercial Taxes officer, Circle D, .....

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under Section 8(1) of the Central Sales Tax Act, 1956 and that, to make things clear, the respondent-Board was entitled to have its registration certificate altered to include tools and plants, including vehicles and other transportable goods, including their spare parts, tubes and tyres . The respondent-Board is engaged in the business of generation and distribution of electricity. What is used in the distribution of electricity or intended for such use falls within the scope of Section 8(3)(b .....

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cessary for the use of linesmen working on transmission lines during the rainy season and winter; similarly, battery cells to the extent they were necessary for use by linesmen for working on transmission lines during the night. 26. In the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Bombay Garage reported in 57 STC, 67, dealer purchased air cooler Penalty was levied on the ground that air cooler was not covered under the registration certificate. Tribunal has deleted the penalty .....

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not contain any details whatsoever of the alleged charges under Section 10(b) except for replacing the language of the said clause, and no such details were given even after being asked for and even the order of the penalty did not contain any of these informations. 28. In thecae of Spring Valley Fruits Products Co. Ltd., Bareilly v. CST (Supra) dealer was registered for plant and machinery. It produces generator. Penalty under Section 10-A was levied on the ground that dealer was not registere .....

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30. In the case of CST v. Rama and Sons reported in 1999 NTN (Vol. 15), 828; 1999 UPTC, 245, dealer was registered for Biscuits under the Central Sales Tax Act and had issued Form-C for purchase of Toffee and Flash Brush. Assessing Authority levied the penalty under Section 10(b) on the ground that dealer was not registered for Toffee and Flash Brush. Penalty was deleted by the Tribunal. While deleting penalty, Tribunal has observed that Toffee and Biscuits were purchased through common invoice, .....

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ical goods, a penalty under Section 10-A read with Section 10(b) of the Act was levied and was confirmed by the Division Bench of Madras High Court on the ground that false representation was made by the dealer. 32. In the case of Integrated Enterprises v. State of Kerala, reported in 46 STC, 103, dealer was registered for Coca cola, Fanta Orange and Fanta Soda while the Form-C was issued for purchase of Bottle Coolers. A penalty was levied under Section 10A read with Section 10(b) of Central Sa .....

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ery. Tribunal has deleted penalty on the ground that at the time of taking registration in statement on oath it was stated that it requires Form-C and 31 for Machinery. This Court held that such statement made at the time of taking registration, did not amount to bonafide belief. It has been held that the dealer had neither applied for registration for Machinery nor in the registration certificate, machine was mentioned and therefore, it could not be said that the dealer was not aware that it wa .....

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entioned oil seed in the registration application and accordingly, registration application was not issued in oil seed. Dealer, however, issued Form C for oil seed. This Court held that dealer was liable for penalty under Section 10-A of the Act for issuing Form C for oil seed for which it was not registered. 35. In the case of CST v. Rewa Cold Fields Ltd. and Anr. (Supra), dealer was engaged in operating the coal mine, sought registration for the purposes of Section 8 of M.P. Sales Tax Act for .....

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r Industries Ltd. none of which is apposite to the precise definition with which we are concerned. It seems to us clear that, drilling bits apart, none of the articles aforementioned can qualify to be articles consumed in the process of manufacture or, to put it in a different way, consumed in the mining of the coal. They may be used for purposes incidental to the mining, but are not integral thereto. 36. The question for consideration is whether the goods in respect of which Form C was issued a .....

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of Form C shows that declaration is required to be made, that the goods are covered by registration certificate, therefore, while issuing Form C in respect of the goods, it is incumbent upon the dealer to be clear that the goods in respect of which Form C is being issued is covered under the registration certificate. Thus, Form C should be issued only when dealer is sure that the goods for which it is issuing Form C is covered under the registration certificate. 38. Applicant is a big company a .....

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ed or not under the registration certificate and dealer was entitled to issue Form C in respect thereof and while issuing Form C in respect of such goods, the applicant acted under the bonafide belief and there was no false representation, Apex court and the various High Courts have held that thy items, which are directly or indirectly required in the manufacturing of goods is eligible for the benefit of concessional rate of tax and would be covered under Section 8(3)(b) of the Act and Rule 13. .....

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ease, HSD, Kerosene, Furnace oil, LPG, Neptha, Aviation, Turbine oil, Aviation Gasoline, MTO, Cape, waxes. The items in respect of which Form C was issued and are in dispute are claimed to have been used in the manufacturing and were intended for use in the manufacturing. 39. With the aforesaid background, let us examine each individual items whether they are eligible for the benefit of concessional rate of tax. LPG Gas Cylinder 40. Claimed to be covered under empty packages. Under the registrat .....

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