1991 (10) TMI 292

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....rms and availed of the concessional rate of tax. The plastic goods purchased were for value of Rs. 7,907.06. The registration certificate, as amended, permitted the use of "C" form for purchase of plastic goods "for resale". The assessing authority, on the basis of the accounts, found during the assessment proceedings that the plastic goods purchased by the assessees were not "resold" but given away as complimentary to the customers who purchased brass ware and aluminium ware or stainless steel ware from the assessees. Construing this to be a violation of section 10(d) of the Act, the assessing authority levied penalty under section 10A of the Act. The assessees went up in appeal before the Appellate Assistant Commissioner. The Appellate....

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....ed in clauses (b), (c) or (d) of sub-section (3) of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose". Section 8(3)(b) dealing with reduction of tax on sales in course of inter-State trade or commerce, provides that every dealer in transactions in the course of inter-State trade or commerce shall be entitled to pay concessional rate of tax in respect of the goods specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Government in that behalf for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of po....

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....limentary, which was the first stand taken by the assessees before the statutory authorities. The records do not show that when the other wares were sold by the assessees to the customers any price of the plastic container was realised from them and sales tax charged from them. There is no record even otherwise to show that for the plastic goods resold, any sales tax was remitted to the authorities under the Act. The absence of levy and remission of sales tax on the alleged resale of the plastic goods would give rise to an inference that there was no resale of the plastic goods and the Joint Commissioner rightly found that the plastic goods were given away free. The assessees failed to adduce any reasonable excuse for use of the goods fo....