C form resale restriction breached when goods were given free as complimentary articles, attracting penalty under the sales tax law.

Plastic goods purchased against C forms for resale must be used only for that permitted purpose. Where the record showed the goods were not resold but given free as complimentary articles with other sales, and no sales tax was charged or remitted on any alleged resale, the use was contrary to the registration certificate. On a combined reading of section 8(3)(b) and section 10(d) of the Central Sales Tax Act, 1956, such misuse attracted the penal consequence under section 10A. The assessee was therefore liable to penalty, and restoration of the penalty was upheld.

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Issues: Whether plastic goods purchased against C forms for resale were in fact resold, and whether their free distribution to customers attracted penalty for violation of section 10(d) of the Central Sales Tax Act, 1956.

Analysis: The registration certificate permitted purchase of plastic goods only for resale. The material on record showed that the goods were not resold but were supplied free as complimentary articles along with other sales. No sales tax was shown to have been charged or remitted on any alleged resale, and no reasonable excuse was offered for using the goods otherwise than for the permitted purpose. On a conjoint reading of section 8(3)(b) and section 10(d), purchase of goods against C form for resale carries the obligation to use them for that purpose, failing which the penal consequence under section 10A follows.

Conclusion: The assessee violated section 10(d) and was liable to penalty under section 10A; the revision order restoring the penalty was in law and called for no interference.

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