- (1.)THE matters in controversy in these two revision cases are the same, and therefore, a common judgement is pronounced in them. They relate to assessment years 1958-59 and 1959-60 respectively. The assessee is a firm that undertook the execution of electrical contracts for the Neiveli Lignite Corporation. They purchased some of their goods form outside the Madras State. In order to obtain a concessional rate of tax on the goods they have purchased, they had to give a declaration, and this declaration was embodied in the certificate of registration in form B that was issued to them, under Rule 5 of the Central Sales Tax Registration and Turnover Rules. In this form, it was specified that the goods, which they were buying from buyers outside the State, and in respect of which they had to give declaration, were intended to be (a) for resale, (b) for use in manufacture and (c)for use in the execution of contracts. This form of the certificate of registration was granted to the assessee, in accordance with the provisions of S. 8 sub-sec. (3) of the Central Sales Tax Act as it remained in force, before an amendment which was brought into effect form 1-10-1958, S. 8 (3) (b), before the amendment, read:
"the goods referred to in sub-sec. (1) (that is goods which are sold to a registered dealer other than Government and which enjoy a lower rate of one percent of sales tax ). . . . . . . . . . . . . . . . . (b ). . . . . . . . . . . . . . . . . . are goods of the class or classes specified in the certificates of registration of the registered dealer purchasing the goods as being intended for resale by him or for use by him in the manufacture of goods for sale or for use by him in the execution of any contract. . . . . . . . . . . . . . . . . . . . . . . "
It is not in dispute that the registration certificate issued to the dealer, for the two years of assessment we are now concerned with, contained only the conditions mentioned above, extracted from S. 8 (3) (b) of the Act, as it stood before the amendment. After the amendment, S. 8 (3) (b) read: "the goods referred to in clause (b) of sub-section (1) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods by him 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: according to the view of the Department, after the amendment came into force, the assessee could use the goods purchased by him as per the certificate only for resale or for manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. But the Department took the view, in this case, that after the amendment, form 1-10-1958, the dealer ought not to have used these electrical goods for the fulfilment of his contract with the Neiveli Lignite Corporation, but he had no other go but to sell them in the absence of his ability to use them under one of the ways mentioned in the new amended section just now extracted. In the view of the Department, his action involved a contravention of S. 10 (d) of the Central Sales tax Act. 1956, which reads:
"10. If any person: (d) after purchasing any goods for any of the purposes specified in clause (b) of subsection (3) of S. 8 fails, without reasonable excuse, to make use of the goods for any such purpose:"
Under S. 10a, it is open to the authority who granted the certificate of registration, to levy a penalty not exceeding one-and-a-half time the tax which would have been levied under the Act on a person guilty of an offence under S. 10 (d) just now mentioned. The authorities, therefore, proceeded to levy penalty on the dealer under S. 10 (d) read with S. 10-A of the Act for each of the two assessment years. He filed appeals to the Appellate Assistant Commissioner as well as to the Sales tax Appellate Tribunal. Beyond some reduction of the penalty, as prayed for by the assessee, and hence he has come to this Court in revision.
(2.)THE first point to be noticed in this case is that the dealer cannot be considered to have contravened S. 10 (d) of the Central Sales Tax Act of 1956. We have already refereed to the fact that the certificate of registration issued to him was in the form, which reproduced the terms of S. 8 (3) (b) before its amendment. Under that section, he would be in order, if he had utilised the goods he had purchased for execution of the contract only if a certificate of registration had been issued to him in a form which embodied the amendment to S. 8 (3) (b) with effect form 1-101958 could it be considered that, without reasonable excuse, he had failed to make use of the goods for nay of the purpose recorded in his certificate of registration. The departmental authorities did not take note of the fact that he certificate of registration is the new form had not been issued to the dealer. On the other hand, the dealer himself should have become aware of the necessity for obtaining a certificate of registration in the new form after 1-10-1958. But the consequence of his not having obtained certificate of registration in the proper form after 1-10-1958, might be different, but with that we are not now concerned. We are concerned here with the short point whether the dealer failed in terms to comply with the terms of the certificate, which had been issued in his case, and which, as we have already mentioned did not carry out the alteration brought about in S. 8 (3) (b) after its amendment. In this view of the matter, we are satisfied that this is not a proper case where the dealer should have been proceeded against for levy of penalty under S. 10-A for contravention of S. 10 (d) of the Central sales Tax Act. There was an argument urged faintly by the learned counsel for the petitioner that, even if the fulfilment of the petitioner's contract with the Neiveli lignite Corporation would in terms comply with S. 8 (3) (b) of the Central Sales Tax act, after its amendment, because, though not by himself, but indirectly through the Neiveli Lignite Corporation, he was engaged in a work involving the generation or distribution of electricity or some other form of power. But in the particular view we have taken of the obligation which flow form the certificate of registration, which was issued to the petitioner, and which alone was in force in his case during the two assessment years under consideration it is unnecessary to consider this aspect of the case.
(3.)LEARNED Government Pleader urged, as a point of law, that the order levying penalty in this case is not appealable. This point was not raised at any anterior stages but as a question of law which might affect jurisdiction, we permitted it tot be argued before us. The Central Sales Tax Act does not make any provision for a hierarchy of appellate and revisional tribunals to whom resort can be had for relief by an aggrieved person. By cross-reference in S. 9 of the Central Sales Tax Act, the appropriate authorities under the Sales Tax Act of the appropriate State have been constituted as the heirarchy of tribunals for assessing, collecting and enforcing payment of tax, penalty, etc, under the Central Sales Tax Act, and the corresponding provisions in the appropriate Sate enactment relating to returns, appeals, reviews, revisions, references, penalties and compounding of offences will apply accordingly. The contention of the learned Government Pleader is that the levy of penalty in this case would fall under S. 46 of the Madras General Sales Tax act, which says that the prescribed authority is reasonable suspected of having committed an offence against that Act, by way of composition of such offence (where the offence consists of failure to pay, or the evasion of any tax recoverable under the Act), in addition to the tax recoverable, whichever is greater, and, in other cases, a sum of money not exceeding in thousand rupees. The learned counsel for the petitioner draws my attention to S. 45 (2) (e) of the Madras General sales Tax Act which reads:
"any person who, after repurchasing any goods in respect of which he has made a declaration under the proviso to sub-section (3) of S. 3, fails without reasonable excuse to make use of the goods for the declared purpose; shall. . . . . . . . . . . . . . . . . . . . . be liable to a fine. . . . . . . . . . . . . . . . . . . . . "
It appears to us that the section of the Madras General Sales Tax Act which corresponds directly to S. 10 (d) of the Central Sales Tax Act is S. 45 (2) (e)extracted above. There is a provision for levy of penalty in lieu of prosecution for offences under S. 45 (2) (e), and this provision is in S. 23 of the Madras General sales Tax Act, which reads:
"if any person, purchasing goods is guilty of an offence under clause (e)of sub-section (2) of S. 45, the assessing authority, may, after giving him a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty a sum not exceeding one and a half times the tax payable on the turnover relating to the sale of such goods at a rate which is equal to the rate which is equal to the rate prescribed in the First Schedule less one per cent: provided that no persecution for an offence under S. 45 shall be instituted in respect of the same facts on which a penalty has been imposed under this section".
It is, therefore, clear that the analogous provisions to S. 10 (d) and S. 10-A of the central Sales Tax Act in the Madras General Sales Tax Act are S. 23 of penalty in this case for the purpose of appeal, should be viewed as one under S. 23 of the madras General Sales Tax Act, 1959. Section 31 of that Act gives a right of appeal to a person aggrieved by an order under S. 23. Therefore, in our opinion, the levy of penalty in this case is an appealable order. We, therefore, overrule the objection of the learned Government Pleader, as to the maintainability of the appeal. The revision cases are, therefore, allowed, but, in the circumstances of the case, there will be no order as to costs.