2020 (2) TMI 473

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....ed 26 March 2002 whereby the learned Appellate Tribunal allowed the appeal of the assessee and held that no penalty could be imposed on the assessee under Section 10-A read with Section 10(b) of the Act for purchase of diesel and fuel for generator set against the "C" forms at concessional rates, as the said items were not separately mentioned in the Registration Certificate of the Assessee under the CST (Registration and Turnover) Rules. The relevant portion of the order passed by the learned Tribunal is quoted below for ready reference :- The generator is already included in the certificate of registration and the fuel, diesel are not included, the assessee was under the bona fide impression that he is entitled to purchase fuel b....

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....said to have committed an offence under section 10(b) of the C.S.T.Act. Relying on the above case law, we hold that the levy of penalty under Section 10-A of the CST Act is not warranted. We set aside the levy of penalty and thereby allowed the appeals in CTA 101/2000, 99/2000 and 102/2000. The Assessing Officer has levied penalty of Rs. 33,30,563/- at 150% on the tax due Rs. 22,20,375/- in CST Asst.Order No.323196/96-97 dated 8.11.99. The first appellate authority has arrived at the tax due for the year 1997-98 at Rs. 13,56,895.76 and levied the penalty at 50% on the tax due at Rs. 6,78,448/- which is disputed in CTA.101/2000 and the appeal stands allowed. For the deletion of Rs. 26,52,112/- by the Appellate Assistant Commissioner....

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....r honestly believes that any particular goods are embraced by the certificate of registration and on that belief makes a representation, he cannot be held guilty of the offence under Section 10(b) of the Act and no penalty can be imposed under Section 10A of the Act. The question whether the assessee acted under the honest belief is a question of fact. Therefore, in our view, mens rea is an essential ingredient for the levy of penalty under Section 10(b) of the Central Sales Tax Act, 1956. The reference is answered accordingly. 4. In CTO v. Rajasthan Taxchem Ltd., (2007) 3 SCC 124, the Hon'ble Supreme Court had also considered a similar case and held that the diesel used for running the generator set for carrying on manufact....