TaxTMI 
TaxTMI 
2022 (8) TMI 159
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....f Rs. 56,19,991.00 has been imposed. 3. The revisionist is a Cooperative Society under the administrative control of Ministry of Fertilizer and Chemical, Department of Fertilizers, Government of India and a registered dealer both under the UP Trade Tax Act as well as the Central Sales Tax Act (hereinafter referred to as "the Act") and is engaged in the business of manufacture and sale of chemical fertilizers [urea] . 4. The controversy in the present case relates to the assessment year 1989-90 arising out of penalty proceedings initiated under Section 10A of the Act, where, by means of order dated 22/02/1993, penalty was imposed on purchase of Iron Steel, cement and other various items to the tune of Rs.1,60,00,000/-. The first appeal was preferred before Joint Commissioner (Appeals), Bareilly which was dismissed on 29/01/1994. The order of the passed by the Joint Commissioner (Appeals), Bareilly was assailed before the Commercial Tax Tribunal (hereinafter referred to as "the Tribunal"), in Second Appeal No. 148 of 1994, which was partly allowed by means of order dated 27.10.2006, and sustained the penalty imposed on purchase of cement and iron & steel. Aggrieved by the order....
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....g the same on concessional rate of tax constituted an offence under Section 10 (b) of the Act. 7. It has been argued on behalf of the revisionist that Railway siding and locomotives are integral part of the machinery used for the manufacturing process as the raw material is carried to the manufacturing plant and also from the manufacturing site to wagons for loading the finished product, and hence no illegality has been committed by purchasing the said goods against Form C. 8. Following questions arise for consideration before this Court :- (I) Whether in view of the judgment of Hon'ble Supreme Court in the case of Sanjiv Fabrics (supra) and in the case of Commissioner of Commercial Taxes Vs. Bombay Garage (supra), the imposition of penalty in absence of mens rea which is essential ingredient for levy of penalty under Section 10-A of the Act, the order passed by the Tribunal is justified? (II) Whether admittedly the railway siding, locomotive and transformer and its spare parts and diesel used therein are so integrally connected without which ultimate production is not possible, still imposition of penalty on the above items is justified? 9. It has be....
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....aler who falsely purchase any class of goods that goods are covered by certificate of registration. Thus, Section 10(b) of the Act clearly indicates that in case any dealer has not obtained registration certificate for purchase of any product or any class of goods or the same are not covered by the certificate of registration then penalty can be levied upon the dealer in case he purchases the said goods utilizing Form-C. In the present case, admittedly, the revisionist did not have Certificate of Registration for purchase of Railway Siding, Locomotives and Transmitters and hence he could not have utilized Form-C for purchase of said goods and his case is covered under Section 10(b) of the Act and therefore penalty proceedings were initiated by the Assessing Authority. 15. Assailing the said penalty, the learned counsel for the revisionist submitted that Railway Siding, Locomotives and Transmitters are essential for manufacture process and in support of his contention the revisionist has relied upon the judgment of Hon'ble Supreme Court in the case of Indian Copper Corporation Ltd. Vs. Commissioner of Commercial Taxes, Bihar and Others, AIR 1965 SC 891, where the petitioner h....
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....ionist and hence neither it has been argued nor it is established that railway siding, locomotives and transmitters are such goods which can be included in any other class or category of goods for which registration certificate has already been granted to the revisionist. 19. Lastly it has been submitted by the revisionist that unless there is element of 'mens rea' which is essential for imposing penalty under Section 10 of the Act is missing and therefore the penalty order is illegal and arbitrary relying upon the judgment of Supreme Court rendered in the case of Commissioner of Sales Tax, U.P. Vs. M/s Sanjeev Fabrics (alongwith another connected case), reported in 2010 NTN (Vol. 44) - 69. 20. In the aforesaid case, the applicant therein had applied for registration of 'cotton' and had claimed exemption on 'cotton' waste' and he was under bona fide belief that 'cotton' includes 'cotton waste' and he had purchased the goods in question and furnished Form-C for the said goods and in the aforesaid circumstances it was canvassed that there was no mens rea which is essential ingredient prior to levying penalty under Section 10 of the Ac....