S.K.MAL LODHA, J. - (1.) THIS is an application under Section 15(2)(b) of the Rajasthan Sales Tax Act, 1954 (No. 29 of 1954) (for short 'the Act'), for directing the Board of Revenue for Rajasthan at Ajmer ('?the Board' herein) to state the case and to refer the following questions of law arising out of its appellate order dated July 2, 1982 which it has refused to do by its order dated February 16, 1983 : 1. Whether, under the facts and circumstances of the case, the learned D. B. was right in dismissing the special appeal in view of order dated May 21, 1982 and held that no penalty could be imposed in the instant case ? 2. Whether, under the facts and circumstances of the case, it is or it is not obligatory for the dealer to maintain separate stock register as provided under Rule 42(2) ? 3. Whether, under the facts and circumstances of the case, if nil tax is assessed whatever the tax liability, if the dealer did not maintain stock register as provided under Rule 42(2) whether amounts to contravention and penalty could be imposed ?
(2.) NON -petitioner No. 1, M/s. Gadia Textiles, Pali (the manufacturer), is a partnership firm of Pali carrying on the business of dyeing and printing cloth and selling it in the market. The case relates to the period July 26, 1972 to March 4, 1973. The cloth, i.e., cotton fabrics were exempt from levy of tax under Section 4(1) of the Act. The subsequent period involved is March 5, 1973 to July 16, 1973. By a notification issued in exercise of the powers conferred by Sub -section (2) of Section 4 of the Act and in supersession of all previous notifications so far as they relate to the exemption of goods, the State Government by means of S. O. 129/F. 2(12)FD/Gr. IV/73/2 dated March 6, 1973 exempted from tax the sale or purchase of cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco as defined in the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957). The C.T.O., Pali (assessing authority) passed an order dated October 1, 1976 which was an assessment -cum -penalty order. He did not levy any tax on the sale of dyed and printed cloth manufactured by non -petitioner No. 1 (the manufacturer) as the goods were exempt from levy of tax. He, however, imposed a penalty of Rs. 500 under Section 16(1 )(n) of the Act on the ground that the manufacturer did not maintain a stock book regarding the raw materials and of finished goods as required by Rule 42(2) of the Rajasthan Sales Tax Rules, 1965 (which will, for the sake of brevity hereinafter be referred to as 'the Rules'). The manufacturer lodged an appeal against the order of imposition of penalty. The Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur by his order dated February 16, 1979 set aside the penalty of Rs. 500. While doing so, he relied on Commissioner of Commercial Taxes, Special Circle -II, Jaipur v. Karani Doll Mitts, Jaipur (1977) 11 TR 432, Commercial Taxes Officer, Special Circle -II, Jaipur v. Laxmi Misthan Bhandar 1978 RRD 633, Commissioner of Commercial Taxes, Special Circle -II, Jaipur v. K.D. Jhaveri, Jaipur (1978) 12 TR 395 and Commissioner of Commercial Taxes, Special Circle -II, Jaipur v. Dharam Chand Paras Chand, Partaniyon ka Rasta, Jaipur (1978) 12 TR 286. This citation has not been correctly shown in the order by the Deputy Commissioner.
(3.) BEING dissatisfied with the order dated February 16, 1979, the assessing authority filed a revision application before the Board. A Single Member of the Board by his order dated January 28, 1982 dismissed the revision along with seven other similar revisions by a common order. The Single Member of the Board while dismissing the revision pbserved as under : In the present batch of eight cases also we find that the dealers had dealt with in textiles totally exempted from tax and this has been accepted by the department. But the dealers had also purchased chemicals and dyes for printing and it has been observed that a separate stock register should have been maintained. It is not observed by the assessing authority that the dealers in the past also had omitted to maintain stock registers and they had been warned that henceforth they should maintain the stock register. It also does not appear that these were fresh registers. It also does not appear that these were fresh dealers, who were assessed to 'nil' tax for the first time. Sub -rule (2) of Rule 42 states that 'every manufacturer liable to pay tax under the Act shall also maintain a stock book in respect of raw materials and of finished goods', certainly the eight dealers had been assessed to 'nil' tax and the department had accepted their contention that the turnover was wholly of sales of exempted goods, namely, the textiles. If the assessing authority had made any observation that the total quantity of raw materials purchased is not commensurate with their use in the printing of exempted goods and some more raw materials must have been misused, one can understand about the imposition of penalty. In other words; the penalty has been imposed only on a technical ground that the stock register was not maintained. As the dealers were not liable to tax, since they dealt with only exempted goods, I do not think that these are fit cases to be admitted only for a technical omission to maintain stock registers when in the previous years no such warning was given asking the dealers to maintain such stock registers.;