Misuse of C form declarations for unauthorised goods attracts penalty when the buyer knew the registration limit.

Use of C form declarations to buy goods not covered by the registration certificate amounted to misuse under section 10(b) of the Central Sales Tax Act, and penalty under section 10-A was legally sustainable. The assessees' plea of bona fide belief was rejected because the goods had not been authorised at the relevant time, and their later inclusion in the registration certificate supported knowledge of the original restriction. On those facts, the revision failed and no further interference was warranted.

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Issues: Whether penalty under section 10-A of the Central Sales Tax Act was justified for purchasing goods not covered by the certificate of registration by using C form declarations, despite the plea of bona fide belief.

Analysis: The assessees purchased polythene bags, chloric acids and chemicals on concessional rate by using C forms although those goods were not authorised by the certificate of registration at the relevant time. The bona fide plea was rejected by the statutory authorities and the Tribunal, and the later inclusion of those very items in the registration certificate supported the finding that the assessees knew the original certificate did not cover them. On those facts, the misuse of C forms attracted liability under section 10(b), making penalty under section 10-A legally sustainable.

Conclusion: The penalty was upheld and no further interference was warranted; the revision failed.

Ratio Decidendi: Use of C form declarations to purchase goods not covered by the certificate of registration constitutes misuse attracting liability under section 10(b) and penalty under section 10-A, and a rejected plea of bona fide belief will not defeat such penalty where the surrounding facts show knowledge of the restriction.

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