Concessional CST purchase for manufacturing generating set upheld where use matched registration certificate and no misuse was shown.

Penalty under section 10-A of the Central Sales Tax Act was not attracted where a diesel generating set was expressly included in the registration certificate for use in manufacture and was purchased against form C at a concessional rate. Its use to generate electricity for running plant and machinery in production fell within the contemplated registered use, and there was no allegation of any unauthorised or different use, or any misstatement by the dealer. The distinction from the cited precedent was that it concerned refusal to include the item in the certificate, not misuse after inclusion. The dealer remained entitled to the concessional rate.

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Issues: Whether penalty under section 10-A of the Central Sales Tax Act was leviable where a diesel generating set, mentioned in the registration certificate as an item for use in manufacture, was purchased against form 'C' at a concessional rate and used to generate electricity for running the plant and machinery used in production.

Analysis: Penalty under section 10-A read with section 10(d) is attracted only when goods purchased for the purposes specified in section 8(3)(b), (c) or (d) are not used for the very purpose for which they were acquired without reasonable excuse. The generating set was expressly included in the registration certificate, and the only use made of it was generation of electricity for running the manufacturing plant. That use was within the contemplation of both the dealer and the assessing authority when the certificate was granted. There was no allegation of any different or unauthorised use, nor any misstatement by the dealer. The earlier decision relied upon was distinguishable because it concerned refusal to include the item in the registration certificate, not misuse after such inclusion.

Conclusion: Penalty was not leviable, and the dealer was entitled to the benefit of purchase at the concessional rate for the said generating set.

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