JUDGMENT

SABYASACHI MUKHARJI, J.:— These appeals by certificate arise from the decision of the Madras High Court dated 4th April, 1972 in Tax Cases Nos. 158-161 of 1966. These are in respect of assessment under Central Sales Tax Act, 1956. The assessees in the four tax cases were assessed under Central Sales Tax Act, 1956 (hereinafter called the Act). The assessment years involved are 1958-59 to 1961-62. It was found that the assessees had purchased motor spare parts on the basis of the C form certificates issued to them under the provisions of the said Act for sale, but instead of selling those, the assessees had used those for their own consumption. The revenue proceeded on the basis that since the goods purchased had not been used for the purposes specified in S.8(3)(b) of the Act and as recorded in the C form certificates, the assessees had committed offences under S. 10(d) of the Act inasmuch as they had used the goods purchased by them on the basis of C form certificate for the purpose other than the one mentioned in the certificates and therefore were liable to pay penalty as well. All the authorities including the Tribunal had found that the assessees had actually committed the offences under S. 10(d) of the Act in using the goods for the purposes other than the one mentioned in C form certificates. Being a finding of fact, the High Court proceeded on the basis that the assessees had committed the offence. The question that was posed before the High Court was what was the quantum of penalty that had to be levied under S. 10A of the Act. Section 10A of the Act deals with penalties. Section 10A is a provision for imposition of penalty in lieu of prosecution. This section was initially added by S. 8 of the Amendment Act 31 of 1958 with effect from 1st Oct., 1958. This section has undergone several amendments. On 9th June, 1969 with retrospective effect the section was amended. The section was again amended with effect from 1st April, 1973. Sub-section (1) of S. 10A which is material for our present purpose at the relevant time was as follows :

"10A. (1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of S. 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax which would have been levied under this Act in respect of the sale to him of the goods, if the offence had not been committed;

Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section."

2. Sub-section (1) of S. 10A Provided that if any person purchasing goods is guilty of an offence under Cl. (b) or Cl. (c) or Cl. (d) of S. 10, the authority who granted him or, as the case may be, is competent to grant him a certificate of registration under the Act, may, after giving him a reasonable opportunity of being heard, by an order in writing, impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax which would have been levied at the relevant time in respect of sale of goods if the offence had not been committed. The only question that was under consideration was the quantum of penalty that had to be levied under S. 10A of the Act.

3. It may be mentioned that S. 10 imposes, penalty if any person, inter alia, under cl. (d) of S. 10 after purchasing any goods for the purpose specified in cl. (b) or cl. (c) or cl. (d) of sub-s. (3) of S. 8, fails without reasonable excuse to make use of the goods for the purposes mentioned in the certificates. Section 8 deals with the rates of tax on sales in the course of inter-State trade or commerce. It stipulates that every dealer, who in the course of inter-State trade or commerce, inter alia, sells to a registered de