False representation in C forms attracts penalty where goods fall outside the specific registration certificate wording.

Penalty under section 10A of the Central Sales Tax Act applies where a registered dealer issues C forms for goods not covered by the specific wording of its registration certificate. The Madras High Court's analysis turned on whether the dealer could reasonably and bona fide believe that generators fell within a certificate limited to machinery, accessories, mill stores and other materials connected with flour milling. It was concluded that a generator is not covered by that restricted description merely because it is industrial equipment generally, and the earlier treatment of generators in the sales tax schedule did not expand the certificate. The false representation finding sustained the penalty and left the Tribunal's order undisturbed.

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Issues: Whether the assessee was liable to penalty under section 10A of the Central Sales Tax Act for issuing C forms and purchasing generators on the footing that they were covered by its registration certificate describing eligible goods as machinery and materials connected with flour milling.

Analysis: Liability under section 10(b) arises where the registered dealer falsely represents that the goods purchased are covered by the registration certificate, and section 10A authorises penalty in lieu of prosecution for that offence. The decisive question was whether the assessee could reasonably and bona fide treat generators as covered by the certificate. The certificate did not authorise purchase of machinery generally, but only machinery, accessories, mill stores and other materials connected with flour milling. A generator is not machinery specially connected with flour milling merely because it may be used in industry generally. The restricted wording of the certificate negatives any bona fide belief that generators were included, and the earlier treatment of generators under the sales tax schedule did not enlarge the scope of the specific registration certificate.

Conclusion: The assessee's use of C forms for purchasing generators amounted to a false representation, and the penalty under section 10A was rightly sustained.

Final Conclusion: The tax revision failed and the penalty order confirmed by the Tribunal stood undisturbed.

Ratio Decidendi: Penalty under section 10A is attracted where a registered dealer knowingly issues C forms for goods not covered by the specific wording of its registration certificate; a bona fide belief can arise only when the certificate reasonably admits the goods in question.

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