TaxTMI 
TaxTMI 
2022 (11) TMI 789
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....he appellant against the assessment order dated 27.02.2002 of the third respondent Deputy Commercial Tax Officer bearing reference TNGST No.2384066/2000-2001. 4. The third respondent Deputy Commercial Tax Officer, vide above assessment order dated 27.02.2002, had determined the total taxable turnover of Rs.14,83,446/- as against the total turnover of Rs.8,17,26,820 for the assessment year 2000-2001. The petitioner had received a sum of Rs.7,49,80,793/- towards dyeing and processing charges on job basis. The petitioner purchased raw materials such as Dyes, Chemicals and other consumable like furnace oil etc. from outside the State against Form 'C' and within the State against Form 'XVII' and also without Form 'XVII' in connection with its business. It was concluded that on perusal of Form 'XVII-A' filed, it showed that the petitioner had issued Form XVII for use in manufacture of goods for the purchase of consumables, i.e. furnace oil to the tune of Rs.10,24,025/- during 2000-2001 for being used for dyeing fabrics. 5. It was therefore concluded that the activity undertaken by the petitioner on job work basis for dyeing fabrics did not amount to manu....
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.... there was no discussion for coming to the conclusion to levy maximum penalty under Sec.23 either in the preassessment notice or in the assessment order. It is also seen that the appellant had disclosed the every fact of issue of Form XVII on the purchase of Furnace Oil and Machinery. The reasons adduced by the assessing officer for levying tax under proviso to Sec.3(3) were that the appellant was not a manufacturer but was only doing job work. As such the usage of Form XVII to buy the goods at concessional rate was incorrect. In this connection I find that there was mutual mistake on the part of the assessing authority also. Because after fully aware of the fact that the appellant was only doing job work and not eligible to buy any goods by issuing Form XVII, the forms should not have been sold to the appellant. 5. As claimed by the authorized representative the Principal Commissioner and Commissioner of Commercial Taxes in Ref.No.02/91364/2000 dated 05.01.2001 issued circular instructions to the assessing officers under Sec.28-A of the Act. In this circular the Commissioner of Commercial Taxes issued instruction to the assessing officers that for the misuse of Form XVII penalty....
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....r the CST Act. In the same way, the same also authorize the manufacturers to effect machinery of capital goods nature required for the manufacturing venture availing concessional rate of tax U/S.3(3). So when the respondent dealers business venture is not once of manufacturing, they are concluded as not eligible to effect the purchase of the said materials. Therefore their business venture is such, they are not permitted by Section 3(3) to effect the purchase of materials involved. Hence, misuse of Form XVII declaration is very well established by wrongly availing the concessional rate of tax for the purchase of the said materials made as if they are manufacturers. Therefore, the yard stick for the levy of 23 penalty considering the balance of tax cannot be accepted as correct one. Further, the levy of penalty U/S 23 stands entirely on a different footing. Therefore, the respondent dealers have misused Form XVII declarations by effecting the purchase of the said goods U/S/3(3) 23(5) to make use of the same for manufacture and their venture is not at all a manufacturing one to enable them to effect the purchase of the said materials U/S.3(3). Therefore, the maximum penalty is leviab....
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....thin State. In case the diversion is detected by the Department and not disclosed voluntarily by the dealer, the penalty may be levied at 5% of course the difference in tax will be collectable in both cases. 13. It is submitted that based on the above Circular, the second respondent Appellate Assistant Commissioner has correctly reduced the rate of penalty to 5%. However, the first respondent Appellate Tribunal has failed to note the above Circular, ignored the same without considering and reversed the well considered order of the second respondent Appellate Assistant Commissioner vide impugned order. Therefore, the impugned order is liable to be quashed and the order the second respondent is liable to be confirmed. 14. This Writ Petition is opposed by the learned Special Government Pleader (T) on the ground that the petitioner has accepted that it has violated the provisions while procuring furnace oil at the concessional rate of tax on the strength of Form XVII under Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 and therefore, the imposition of penalty under Section 23 of the Tamil Nadu General Sales Tax Act, 1959 was correctly made by the third respondent Deputy C....
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....ided further that any dealer who, after purchasing the goods in respect of which he had furnished any declaration, fails to make use of the goods so purchased for the purpose specified in the declaration but disposes of such goods in any other manner, shall pay the difference of tax payable on the turnover relating to sale of such goods at the rate prescribed and three per cent: Provided also that the dealer purchasing the goods maintains a separate stock account for each of the goods purchased by him showing such particulars as may be prescribed. Section 3(5) Notwithstanding anything contained in subsection( 2), but subject to the provisions of sub-section (1), the tax payable by a dealer in respect of sale of any of the goods mentioned in the Eighth Schedule to any other dealer for installation of, and use in his factory site situate within the State for the manufacture of any goods shall be at the rate of three per cent on the turnover relating to such sale; Provided that the provisions of this sub-section shall not apply to any sale, unless the dealer selling such goods furnishes to the assessing authority in the prescribed manner and within the prescribed period, a declarat....
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.... half times the tax payable on the turnover relating to the sale of such goods at a rate which is equal to the rate prescribed in the First Schedule less three percent: Provided that no prosecution for an offence under section 45 shall be instituted in respect of the same facts on which a penalty has been imposed under this section. 21. As per Section 45(2)(e) of the Act, if any person who after purchasing any goods in respect of which he has made a declaration under the second proviso to Sub-Section (3) or Sub-Section (5) of Section 3 fails without reasonable excuse to make use of the goods for the declared purpose, such person is a guilty of such offence and penalty may be imposed on him. Section 45(2)(e) of the Act as it stood then reads as under:- Section 45. Offenses and Penalties. __ (1)....... (2) Any person who __ (a)........... ............... (e) after purchasing any goods in respect of which he has made a declaration under the second proviso to sub-section (3) or sub-section (5) of section 3 fails without reasonable excuse to make use of the goods for the declared purpose; or 22. Circular dated 05.01.2001 was issued by the Principal Commissioner and Commi....