TaxTMI 
TaxTMI 
2010 (9) TMI 971
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....red dealer. During the relevant period April 1, 1999 to March 31, 2000, the petitioners had purchased the goods from the exempt unit having eligibility certificate under exemption Notification No. A-3-11-86-ST-V(74) dated October 16, 1986. The resale of these goods by the petitioner to its dealers was exempted under the Notification No. A11-86-ST-V(77) dated October 16, 1986, subject to the compliance with the conditions mentioned in the said notification. During the assessment proceedings, the assessing authorities had issued the notice dated March 29, 2003, requiring the petitioners to show cause as to why the penalty for nonaffixation of the seal as required under section 43(3) read with rule 66(2) be not imposed. The petitioners submitt....
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....the goods manufactured by an industrial unit availing of the facility of exemption from payment of tax in whole and no tax has been paid on such goods. Section 43(6) provides that if a registered dealer referred to in section 43(3) fails to make statement in terms of the said section, it is presumed, unless the contrary is proved by him, that he has facilitated the evasion of tax on sale of such goods and accordingly, he is liable to pay penalty at the rate prescribed. Rule 66(2) requires a registered dealer referred in section 43(3) to affix a rubber stamp in the bill, cash memo or invoice stating that "goods sold are manufactured by industrial unit holding eligibility certificate/eligible for exemption and are exempt from payment of tax-c....
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.... Act and further that the authority concerned is required to arrive at the conclusion by a judicial process before levying sales tax, that the goods have been sold inside the State and in doing so, can rely upon the statutory rule of presumption contained in section 28B of the Act, which may be rebutted by the person against whom action is taken. The Supreme Court in the matter of State of Madhya Pradesh v. Bharat Heavy Electricals reported in [1997] 106 STC 604, while dealing with the similar provision contained in section 7(5) of the Madhya Pradesh Stahaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976, has held that (pages 607 and 608 in 106 STC): "10. . . . There can be several good reasons why a registered dealer may have failed....
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....9 VST 466; [2007] 11 STJ 297, while considering the levy of penalty in respect of the presumption under section 7(5) of the Entry Tax Act has held that (page 477 in 19 VST): "Applying the aforesaid constructions of sub-sections (1) and (5) of section 7 of the Act, we are of the considered opinion that the penalty in respect of sales to registered dealers of the amount of Rs. 47,47,581.71 was not leviable when such registered dealers have certified that entry tax was paid by them on the goods purchased by them. Once there was satisfactory evidence before the authorities that the purchasing registered dealers had in fact, paid the entry tax on the coal purchased by them from the petitioner, there was, in fact, no eva sion of entry tax and, t....
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....ority. The counsel for the respondent on the directions of this court has produced the original record of the revisional authority and on perusal of the same, it is found that though the certificate issued by the purchasing dealers were filed before the revisional authority, but the authority failed to consider them while affirming the levy of penalty under section 43(6) of the Act. This material was produced by the petitioners in rebuttal of presumption about facilitation of evasion of tax, therefore, it was required to be considered while imposing or affirming the penalty under section 43(6) on the presumption of evasion of tax. For the aforesaid reason, we find that the impugned order passed by the revisional authority is not sustaina....