DWARKA PRASAD, J. - (1.) THESE two references have been made by the Board of Revenue for Rajasthan at Ajmer under section 15 of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act"), at the instance of the assessee, the Rajasthan State Electricity Board, Jaipur (hereinafter referred to as "the Electricity Board" ). The Rajasthan State Electricity Board is a corporation engaged in the generation and distribution of electrical energy in the State of Rajasthan, and is registered as a dealer under the Act and the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act" ). Registration certificates were granted by the Sales Tax Officer, B Circle, Jaipur, to the Electricity Board on the basis of which it was entitled to purchase goods against C forms. The Electricity Board imported certain goods against C forms in the State of Rajasthan on payment of concessional rate of tax under the Central Sales Tax Act. But the Sales tax Officer objected to the purchase of tyres and tubes of motor vehicles, battery cells, varnish and paints, soaps, raincoats and iron safes against C forms by the Electricity Board and held that the aforesaid goods were not used for the generation and distribution of electricity and, as such, tax to the full extent payable under the Central Act should have been paid by the Electricity Board and as he was of the opinion that the Electricity Board misused the C forms in the purhase of the aforesaid articles, he held that the Electricity Board was liable to payment of penalty under section 10a of the Central Sales Tax Act. The Electricity Board preferred an appeal to the Deputy Commissioner, Excise and Taxation (Appeals), Ajmer and Kota Division, Jaipur, who was of the opinion that the import of soaps to the extent of half of the quantity may be considered as of utility in the maintenance, etc. , of the machines and half may be considered as irregular import on C forms, while the purchase of varnish and paints was considered to be for the generation of electricity as the same were required for the cleaning and painting of the machines and boilers. Similarly, tyres and tubes were also held to be essential for the transmission of electricity, but the remaining articles, i. e. , iron safes, raincoats and battery cells were considered to be commodities which had no direct utility in the generation and distribution of electricity. Thus, the appeal preferred by the Electricity Board was partly allowed by the Deputy Commissioner. Then a revision was preferred to the Board of Revenue. The learned single Member of the Board of Revenue by his order dated 18th December, 1964, partly accepted the revision petition and set aside the order of the Deputy Commissioner as well as of the Sales Tax Officer and remanded the matter back to him for fresh orders after investigation and hearing the Electricity Board. However, the learned Member of the Board of Revenue held that paints could be imported to the extent they are required for painting of electrical goods and battery cells could be purchased on C forms so far as they were necessary for the linesmen to work at night on the transmission towers to rectify electrical faults, but in respect of the remaining items, iron safes, raincoats, tyres and tubes, the learned single Member of the Board of Revenue held that they were of no use for the generation or distribution of electricity. The Electricity Board, thereupon, applied to the Board of Revenue for making a reference to this Court, but the reference application was rejected by the learned Member of the Board of Revenue by his order dated 1st October, 1965. Then, an application was preferred to this Court under section 15 (2) (b) of the Act and by order dated 27th September, 1966, this Court directed the Board of Revenue to refer the following two questions for decision by this Court along with the statement of the case : " (1) Whether, on the facts and in the circumstances of the case, the application is entitled to purchase the goods, tyres, tubes, raincoats, soaps, etc. , against C forms and no case of misuse of C forms is made out against the applicant ? (2) Whether, on the facts and in the circumstances of the case, tyres, tubes, raincoats and soaps, etc. , are covered in the list given in the Central registration certificate, exhibit 1, and the applicant has rightly used the C forms for the purchase of the said goods ?"
(2.) IT is in this manner that Reference Case No. 1 of 1967 has come up before us. The Electricity Board felt that the Central registration certificate issued under the Central Sales Tax, 1956, was ambiguous and confusing and was not clear in respect of the goods which the Electricity Board could purchase against C forms. The Electricity Board, therefore, filed an application dated 3rd November, 1962, before the Sales Tax Officer, B Circle, Jaipur, for an amendment of the Central registration certificate by making the following additions : " Tools and plants including vehicles and other transportable goods including their spare parts, tubes and tyres, used/employed for the purpose of construction, operation and maintenance of the power system (generation, transmission and distribution ). " The Sales Tax Officer rejected the application by his order dated 5th November, 1962. But, on appeal, the Deputy Commissioner, Excise and Taxation (Appeals), Ajmer and Kota Division, Jaipur, by his order dated 21st November, 1962, held that the goods desired to be purchased by the Board on concessional rates on C forms obviously helped the generation or distribution of electricity and he, therefore, allowed the appeal and accepted the application of the Electricity Board for amendment of the Central registration certificate. The Sales Tax Officer, thereupon, filed a revision petition before the Board of Revenue and the Board vide its order dated 18th December, 1964, held that the purchase of motor vehicles could not be justified on C forms, as motor vehicles cannot be used for generation and distribution of electricity. The Board of Revenue, therefore, accepted the revision application and rejected the application of the Electricity Board for amendment of the Central registration certificate. An application for making a reference to this Court was also rejected by the Board of Revenue. Thereafter, this Court by its order dated 20th August, 1969, directed the Board of Revenue to refer the following question of law to this Court for its opinion along with the statement of case : " Whether, on the facts and in the circumstances of this case, the application of the State Electricity Board for the amendment and addition of 'tools and plants' including vehicles and other transportable goods, their spare parts, tubes and tyres used by them, employed for the purpose of construction, operation and maintenance of the power system (generation, transmission and distribution) in the Central registration certificate is maintainable and the amendment and addition prayed for should be allowed ?" This is how Reference Case No. 29 of 1970 has come up before us. As, in both these reference cases, common questions of law are involved, relating to the goods which the Electricity Board could purchase on the basis of the Central registration certificate, it would be convenient to dispose them of by a common order. It was argued by Mr. P. N. Datt, appearing for the Electricity Board, that the goods referred to in the two reference cases, namely, motor vehicles with their spare parts, tubes and tyres, battery cells, iron safes, varnishes and paints, soaps, raincoats, etc. , are goods used or employed for the purpose of construction, operation and maintenance of the power system, namely, generation, transmission and distribution of electricity and, as such, the Electricity Board should be allowed to purchase the same on concessional rates on the basis of the Central registration certificate. The argument of the learned counsel is that the aforesaid goods are used by the Electricity Board in furtherance and development of their business activity of generating, distributing and supplying of electricity. On the other hand, Mr. B. K. Pathak, appearing for the department, argued that the specified goods are not intended for use directly in the generation, distribution and transmission of electricity and, as such, they could not be exempted from payment of normal rate of sales tax nor the desired addition could be made in the Central registration certificate of the Electricity Board. In order to appreciate the real controversy between the parties, it is necessary briefly to consider the scheme of the Central Sales Tax Act, 1956 (hereinafter referred to as the "central Act"), and the relevant provisions thereof. The Central Act provides for the levy, collection and distribution of tax on sale of goods in the course of inter-State trade or commerce and declares certain goods to be of special importance in inter-State trade or commerce and specifies the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods of special importance shall be subjected. Under clause (b) of section 2 of the Central Act, a "dealer" has been defined as a person who carries on the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, and includes a local authority, a body corporate, a company and a Government, which carries on the business of buying, selling, supplying or distributing goods, directly or otherwise. Clause (g) of section 2 defines "sale" as any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on hire-purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods. Section 6 is the charging section, which imposes the liability upon every dealer with effect from the date which may be specified by the Central Government to pay tax under the Act on all sales effected by him in the course of inter-State trade or commerce during any year, on and from the date so notified. Section 7 provides the machinery for registration of dealers while section 8 prescribes the rates of tax on sales in the course of inter-State trade or commerce. Sub-section (1) of section 8 prescribes the rates of tax to be paid on his turnover by a dealer, if he sells in the course of inter-State trade or commerce to the Government any goods, or if he sells to a registered dealer other than the Government goods of the description referred to in sub-section (3) of that section. Sub-section (2) of section 8 provides the rate of tax payable by any dealer in any case not falling within sub-section (1), in respect of the sales by him of any goods in the course of inter-State trade or commerce. Sub-section (3) of section 8, which is very relevant, runs as under : " 8. (3) The goods referred to in clause (b) of sub-section (1) - (a) omitted. (b ). . . . . . . . . . . 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 him made by the Central Government in this behalf, for use 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; (c ). . . . . . . . . (d ). . . . . . . . . . " Under section 9 of the Central Act, the tax is to be levied and collected by the Government of India in the State from which the movement of the goods commenced and the authorities who would assess and collect the tax under the Act are the authorities under the sales tax law of that State. Section 13 confers power upon the Central Government to make rules on several matters including enumeration of goods or class of goods used 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, as specified in clause (e) of sub-section (1) of section 13 of the Act.
(3.) IN exercise of the powers conferred by section 13 (1) (e) of the Central Act, the Central Government has made rule 13 of the Central Sales tax (Registration and Turnover) Rules, 1957, which runs as under : " 13. Prescription of goods for certain purposes.- The goods referred to in clause (b) of subsection (3) of section 8 which a registered dealer may purchase, shall be goods intended for use by him as raw materials, 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. " A certificate of registration is granted on an application for registration made under section 7 of the Act by a dealer. Rule 7 makes provision for amendment in the certificate of registration and authorises the dealer, who desires the certificate of registration granted to him to be amended, to submit an application for that purpose to the notified authority setting out the specific matter in respect of which he desires such amendment and the reasons therefor, together with the certificate of registration and the copies thereof, if any, granted to him; and such authority may, if satisfied with the reasons given, make such amendments, as it thinks necessary, in the certificate of registration and the copies thereof, if any, granted to him. The certificate of registration issued to the Electricity Board under the Act specified the following goods for the purposes of clause (b) of sub-section (1) of section 8 : " For use in manufacture 1. Fuel oils, lubricating oils. 2. Cement. 3. Hardware goods. 4. Transmission materials, poles, copper wire, A. C. S. R. G. I. Pipes, insulators, and other materials. 5. All types of cables and electrical equipments. 6. Accessories of transmission lines. 7. Tools, instruments and other minor articles (other than the declared goods under section 14 of the Central Sales Tax Act, 1956) required for the use of the Rajasthan State Electricity Board. " Insertion made with effect from 1st October, 1958. " All sorts of plants and machinery and other equipment required for installation or running and maintenance of power-houses and workshops. " As already mentioned above, the application for amendment of the registration certificate by addition of "tools and plants", including vehicles and other transportable goods, their spare parts, tubes and tyres, was made by the Electricity Board on 5th November, 1962. Prior to that, the goods, the purchase of which was permissible under section 8 (3) (b) read with rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957, on the concessional rate of tax prescribed under the provisions of section 8 (1) (b) of the Central Act, included tools, instruments and other minor articles and all sorts of plants and machinery and other equipment required for installation or running and maintenance of power-houses and workshops. ;