Penalty for misuse of concessional sales tax goods fails where non-use was justified by circumstances beyond the purchaser's control.

Penalty under section 10 of the Central Sales Tax Act, 1956 is attracted only when goods purchased for a concessional purpose are not used for that purpose without reasonable excuse. A purchaser of a power-loom claimed personal use at an allotted site, but the plot was never made available for reasons beyond his control, so the machine was not used as intended and was instead let out on rent. That inability was treated as a reasonable justification, not wilful default. Penalty was therefore not leviable, and the order deleting the penalty was upheld.

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Issues: Whether penalty was leviable under section 10 of the Central Sales Tax Act, 1956 when the purchaser, after buying a power-loom at concessional rate for personal use, could not use it for that purpose because the allotted plot was not made available and instead let it out on rent.

Analysis: Section 10 contemplates penal consequences where goods purchased for a specified concessional purpose are not used for that purpose without reasonable excuse. The purchaser had intended to use the power-loom for personal use on land to be allotted by RIICO, but the allotment did not materialise for reasons beyond his control. In those circumstances, the inability to use the machine as originally intended was treated as a reasonable justification, and letting it out on rent was not regarded as a wilful default warranting penalty.

Conclusion: Penalty was not leviable; the order of the Tax Board setting aside the penalty was upheld, and the revision was dismissed in favour of the assessee.

Ratio Decidendi: Penalty under section 10 of the Central Sales Tax Act, 1956 can be imposed only where the purchaser fails, without reasonable excuse, to use the goods for the concessional purpose for which they were purchased.

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