TaxTMI 
TaxTMI 
1997 (3) TMI 583
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....e on the sale to or purchase by a registered dealer of any raw material for the manufacture in the State of goods other than exempted goods for sale by him within the State or in the course of inter-State trade or commerce or in the course of export outside the territory of India shall be at a concessional rate of 2 per cent of sale or purchase price of such raw material. Explanation.-For the purpose of this sub-section, 'exempted goods' means (i) goods exempted under sub-section (1) of section 4, and (ii) goods liable to additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and which are exempt from the payment of tax by or under the provisions of this Act. (2) Where any raw material purchased by a registered dealer under subsection (1) is utilised by him for any purpose other than a purpose specified therein, such dealer shall be liable to pay as penalty, such amount, not less than the difference between the amount of tax on the sale of such raw material at the full rate applicable thereto under section 5 and the amount of tax payable under sub-section (1) but not exceeding one and one quarter times the amount of tax at such....
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.... five years from the date of commissioning of such industry: Provided further that the State Government may, at any time, by notification in the Official Gazette, order that a notified industry shall cease to be as such from such date as may be specified and thereupon the registered dealer who has commissioned such industry shall not be entitled to remission of tax under the provisions of this sub-section. (2) Where any raw material purchased by a registered dealer under subsection (1) is utilised by him for any purpose other than a purpose specified therein, such dealer shall be liable to pay as penalty, such amount, not less than the amount of tax on the sale of such raw material at the full rate applicable thereto under section 5, but not exceeding 1¼ times the amount of tax at such full rate as the assessing authority may determine, having regard to the circumstances in which such use was made. Explanation.-For the purpose of this section, 'notified industry' means an industry notified by the State Government in this behalf. 5CCCC. Special rate of tax on certain sales.-(1) Notwithstanding anything contained in section 5 and subject to such conditions and rest....
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....e requirement of diesel is estimated to be 1,18,600 litres per day. This diesel is purchased from the Indian Oil Corporation (IOC). The dispute relates to 1981-82 at which time the rate of tax under the RST Act applicable to the sale of diesel was 12½ per cent. Section 5CCCC was inserted in the RST Act with effect from April 7, 1979 and pursuant thereto rule 25C(1b) was inserted in the Rajasthan Sales Tax Rules, 1955 on April 30, 1980. The IOC nonetheless continued to sell diesel to the petitioner-company charging sales tax at 12½ per cent in the absence of a clarification from the Commercial Taxes Department. The Commercial Taxes Officer (CTO) clarified to the 10C vide letter dated December 23, 1981 that the diesel could be sold under section 5CCCC after charging sales tax at 4 per cent and form S.T. 17C could be obtained for this purpose. It will be pertinent to point out here that with effect from July 2, 1979 the registration certificate of the petitioner had been amended to include the purchase of diesel, inter alia. 5.. For the period October, 1981-December, 1981 for which IOC's return was due the additional sales tax collected from the petitioner-company ....
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....and lubricants were not used as an ingredient in the goods manufactured by the petitioner-company and nor were they fuel and lubricants required in the process of manufacture of goods by the petitioner-company but were used for generating electricity which was not among the goods manufactured for sale by the petitionercompany. 7.. Pursuant to this determination the petitioner-company issued declarations in form S.T. 17C as envisaged by section 5CCCC and rule 25C(1b) and accordingly IOC's assessments were completed treating the sales of diesel and lubricants to the petitioner-company for the generation of electricity to be taxable at 4 per cent. 8.. Thereafter it would appear that quite independently of the matter to which the present controversy relates certain parties who on the basis of the determination by the Additional Commissioner vide order dated April 26, 1982 referred to above had begun being charged by the IOC tax on the sale of diesel at 4 per cent had moved an application under section 12A, RST Act in which the question referred was: "Whether under the facts and circumstances of the case the petitioners can purchase diesel oil (LDO and HSD) under section 5C of ....
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....cause as to why penalty should not be imposed under section 5CCCC(3), RST Act. By an order dated May 15, 1984 the CTO in the course of a final assessment order for the assessment year 1981-82 imposed a penalty of Rs. 20 lacs under section 5CCCC(3), RST Act in respect of purchases of diesel for generation of electricity on the ground of misuse of form S.T. 17C. 10.. In Writ Petition No. 564 of 1984 the setting aside of the order of the Additional Commissioner dated March 30, 1984 and a direction to act in accordance with the order of the Additional Commissioner dated April 26, 1982 has been sought. In Writ Petition No. 565 of 1984 the setting aside of the penalty has been sought in addition. 11.. On behalf of the department it is contended that sections 5C and 5CC, RST Act are the relevant provisions. 12.. We have heard the learned counsel for the parties and given our careful consideration to the issues involved and to the relevant provisions of law. 13.. As regards the imposition of penalty, irrespective of whether the appropriate section is held to be 5C, 5CC or 5CCCC, RST Act, the fact remains that the petitioner sought recourse to section 5CCCC, RST Act and f....