S.K.MAL LODHA, J. - (1.) THIS is an application under Section 15(2)(b) of the Rajasthan Sales Tax Act (No. XXIX of 1954) (for short 'the Act') for directing the Board of Revenue for Rajasthan, Ajmer ('the Board' herein) to state the case and refer the following question of law to this Court, which is said to arise out of its order dated 21st December, 1978 ; which the Board refused to do vide its order dated 25th September, 1979 : Whether under the facts and circumstances of the case the Board of Revenue was justified in setting aside the penalty of Rs. 25,000 imposed under Section 16(1)(k) of the Rajasthan Sales Tax Act, 1954 ?
(2.) 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, 1986 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 within the State of Rajasthan by giving declaration in form S.T. 17 that it purchases cotton for resale in Rajasthan. It ginned the cotton by process of manufacture separating the cotton from the cotton seeds. The ginned cotton was resold within Rajasthan, on which it paid sales tax but cotton seeds extracted from cotton by ginning were exported out of Rajasthan and as such no sales tax was paid by the dealer on the cotton seeds of the value of Rs. 6,87,563.13. The assessing authority by its order dated 10th October, 1973 imposed a penalty of Rs. 25,000 under Section 16(1)(k) of the Act. The dealer -assessee lodged an appeal and the Deputy Commissioner (Appeals), Commercial Taxes, Bikaner accepted the appeal on 3rd January, 1975 and set aside the penalty imposed under Section 16(1)(k) of the Act. The assessing authority filed a revision before the Board. The Division Bench of the Board dismissed the revision by its order dated 21st December, 1978. The relevant portion of the order of the Board, may usefully be excerpted: In the instant case cotton was purchased by the non -petitioner but cotton ginned or unginned being the same commodity in view of the above -mentioned judgment and the non -petitioner purchased cotton only for resale within the State, it would mean that full compliance was made by the non -petitioner of the declarations under (form) S.T. 17 as no cotton seeds were purchased by him for resale within State. When the question of levy of purchase tax on the sale of 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.
(3.) 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.;