- (1.) S. N. TIWARI, J. Since common questions of law arise in both the revisions, they are being disposed of by the present common order.
(2.) THESE revisions are directed against the order dated November 25, 1992 dismissing appeals No. 228 of 1993 and 229 of 1993 whereby imposition of penalty under section 4-B (5) of the U. P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") levied upon the revisionist was upheld by the Trade Tax Tribunal, Bench-I, Meerut. The revisionist is a registered dealer for the manufacture and sale of transformers and also for its repairs. Recognition certificate for purchase of raw materials at concessional rates was issued to the revisionist. It was effective from October 30, 1980. It the assessment years 1984-85 and 1985-86 the revisionist purchased raw materials after furnishing certificate in form 3-B of the Act. The assessing authority held that the raw materials so acquired were used in contravention of the provisions of section 4-B in the repair of transformers instead of in manufacturing the same. Consequently the penalty of Rs. 46,000 and Rs. 34,000 were imposed in the assessment years 1984-85 and 1985-86 respectively. The appeals against this order were filed before the Deputy Commissioner, Trade Tax, which had been rejected. Feeling aggrieved, second appeals were filed before the Trade Tax Tribunal. The Tribunal also dismissed the appeals. Feeling aggrieved these revisions have been preferred. Learned counsel for the parties were heard at length.
(3.) THE first question for determination is whether the revisionist used the raw material obtained on the basis of form 3-B against the provisions of section 4-B and against the condition of recognition certificate. THE relevant provisions of section 4-B is reproduced as follows : " Section 4-B : Special relief to certain manufacturers.- (1) Notwithstanding anything contained in sections 3, 3-A, 3-AAAA and 3-D, - (a) Where any goods liable to tax under sub-section (1) of section 3-D are purchased by a dealer who is liable to tax on the turnover of first purchases, under that sub-section or where any goods are purchased by any dealer in circumstances in which such a dealer is liable to purchase tax in respect thereof under section 3-AAAA and the dealer holds a recognition certificate issued under sub-section (2) in respect thereof, he shall be liable in respect of those goods to tax at such concessional rate, or be wholly or partly exempt from tax, whether unconditionally or subject to the conditions and restrictions specified in that behalf, as may be notified in the Gazette by the State Government in that behalf : . . . . . . . . . . . . . (b) Where any goods liable to tax under any other provisions of this Act are sold by a dealer to another dealer and such other dealer furnishes to the selling dealer in the prescribed form and manner a certificate to the effect that he holds a recognition certificate issued under sub-section (2) in respect thereof, the selling dealer shall be liable in respect of those goods to tax at such concessional rate, or be wholly or partly exempt from tax, whether unconditionally or subject to the conditions and restrictions specified in that behalf, as may be notified in the Gazette by the State Government in that behalf. . . . . . . . . . . . . . (2) Where a dealer requires any goods, referred to in sub-section (1) for use in the manufacture by him, in the State of any notified goods, or in the packing of such notified goods manufactured or processed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof; and if the applicant satisfies such requirement and conditions as may be prescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form, and subject to such conditions, as may be prescribed. Explanation.- For the purposes of this sub-section, - (a) goods required for use in manufacture shall mean raw materials, processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants; and (b) 'notified goods' means such goods as may, from time to time, be notified by the State Government in that behalf. . . . . . . . . . . . . . . (5) Where a dealer in whose favour a recognition certificate has been granted under sub-section (2) has used the goods, after their purchase after payment of the tax at concessional rate under this section or, as the case may be, without payment of the tax, for a purpose other than that for which the recognition certificate was granted or has otherwise disposed of the said goods, such dealer shall be liable to pay as penalty such amount as the assessing authority may fix - (a) not less than the difference between the amount of the tax on the sale or purchase of such goods, payable under any provision of this Act and the amount of the tax payable at concessional rate under this section, where the goods are purchased after paying the tax at concessional rate; and (b) not less than the amount of tax payable under section 3, section 3-A, section 3-AA, or section 3-D, as the case may be, where the goods are purchased without payment of the tax, but not exceeding three times the amount of such difference or of the tax, as the case may be. " Rule 25-A of the U. P. Trade Tax Rules provides that an application for recognition shall be moved in form No. XVIII. It further provides that if the Sales Tax Officer is satisfied that the particulars contained in the application are correct and complete, he shall grant a recognition certificate in form No. XIX to the dealers. Form No. XIX contains the conditions of the grant of certificate. Condition No. 3 specifies that the goods purchased on the strength of the recognition certificate shall be used only by the recognized dealer only for the manufacture of notified goods.;