Job-work purchases against declaration forms fell within section 8(3)(b), so the penalty notices were quashed as unsustainable.

Penalty notices under the Rajasthan Sales Tax Act and the Central Sales Tax Act were held unsustainable where registered dealers purchased goods against declaration forms for use in job-work for a third party, because section 8(3)(b) was applied in line with the Supreme Court view that such materials may be covered when the processed goods are intended for sale by that third party. The challenge to the proposed penalty was therefore not maintainable on the face of the record, and the objection that the dealers should first pursue the point before the assessing authority was rejected as unnecessary where the notice itself was defective. The impugned notices were quashed and no further order was made.

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Issues: Whether the penalty notices issued under section 10 read with section 5CC of the Rajasthan Sales Tax Act and section 10A read with section 8(3)(b) of the Central Sales Tax Act were sustainable where the goods were purchased against declaration forms for use in job-work for a third party, and whether the matter should be sent back to the assessing authority.

Analysis: The notice was examined in the light of the Supreme Court ruling that section 8(3)(b) covers a case where a registered dealer manufactures or processes goods for a third party on a job-contract and uses materials purchased against the registration certificate and declaration forms, so long as the manufactured or processed goods are intended for sale by that third party. On that basis, the challenge to the proposed penalty could not be sustained on the face of the record. The objection that the petitioners should first raise the point before the sales tax authorities was not accepted, because a notice which is bad on the face of it need not be sent back for a pointless of the same exercise before the assessing authority.

Conclusion: The impugned notices were quashed and no further order could be passed on them.

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