Registration entries for raw materials bind the department, while tender-form sales linked to business remain taxable turnover.

Goods recorded as raw materials in a registration certificate cannot later be denied that character by the department for levy of tax or penalty when the entry has been accepted. Sale of tender forms used to enable participation in bidding for the assessee's business was treated as connected with and ancillary to the trading activity, so the receipts formed part of taxable turnover. The material distinction was between the conclusive effect of the registration entry for raw materials and the business nexus of ancillary sales. Relief was therefore available only on the first point, while the turnover from tender forms remained taxable.

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Issues: (i) whether goods entered in the registration certificate as raw materials could later be denied that character and subjected to tax or penalty; and (ii) whether sale of tender forms formed part of the taxable turnover as incidental or ancillary to the assessee's business.

Issue (i): whether goods entered in the registration certificate as raw materials could later be denied that character and subjected to tax or penalty.

Analysis: The entry of goods as raw materials in the registration certificate was treated as conclusive for the purpose of the assessee's entitlement. Once the department had accepted such entry, it could not later dispute that the same goods were not raw materials for levy purposes.

Conclusion: Decided in favour of the assessee. The department could not deny the goods the character of raw materials, nor levy tax or penalty on that basis.

Issue (ii): whether sale of tender forms formed part of the taxable turnover as incidental or ancillary to the assessee's business.

Analysis: Tender forms enabled intending suppliers to participate in the bidding process for supply of materials dealt in by the assessee. Their sale was therefore connected with and ancillary to the assessee's trading activity.

Conclusion: Decided in favour of the revenue. The sale of tender forms was includible in the taxable turnover.

Final Conclusion: The revision succeeded only on the first issue and failed on the second, resulting in a partial allowance with the assessee obtaining relief against tax and penalty on the goods treated as raw materials, while the turnover from tender forms remained taxable.

Ratio Decidendi: Goods shown as raw materials in the registration certificate cannot subsequently be disputed by the department for levy purposes, and sales connected with the business and enabling participation in its commercial activity are includible in taxable turnover as incidental or ancillary sales.

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