Back
1985 Supreme(Raj) 190
High Court Of Rajasthan
Judgename : S.K. Mal Lodha,S.N. Bhargava
Commercial Taxes Officer - Appellant
Versus
Hindustan Radiator - Respondent
D.B. Civil Sales Tax Case No. 85 of 1983
Decided On : 08/26/1985
Appearance :
K.C. Bhandari, for the Appellant
S.K. Kackar, for the Respondents
The entry in the registration certificate of a manufacturer about certain articles being raw materials for his manufacturing activities is conclusive and binding on the department.
Headnote:
SALES TAX - Raw material - Entry in registration certificate - Conclusive proof - Penalty - Not leviable - Rajasthan Sales Tax Act (No. 29 of 1954), Secs. 2(mm), 5C(1), 5C(2).
Fact of the Case:
The dealer-assessee, a registered dealer under the Rajasthan Sales Tax Act, 1954, purchased hydrochloric acid by giving a declaration that it is a raw material for manufacturing radiators and paid concessional tax at 1%. The assessing authority imposed a penalty under Section 5C(2) of the Act, holding that hydrochloric acid is not a raw material. The dealer-assessee appealed, and the Deputy Commissioner (Appeals), the Board in revision, and the Division Bench of the Board dismissed the penalty, holding that the entry in the registration certificate of a manufacturer about certain articles being raw materials for his manufacturing activities is conclusive and any modification thereof can only be made by the competent authority after following the prescribed procedure.
Finding of the Court:
The Court held that the entry in the registration certificate of the dealer-assessee that hydrochloric acid is a raw material for the manufacture of radiators is conclusive and binding on the department. The Court further held that the penalty under Section 5C(2) of the Act could not be imposed on the dealer-assessee as there was no contravention of the conditions attached to the concession that was made available to it under Section 5C(1) of the Act.
Issues: Whether the entry in the registration certificate of a manufacturer about certain articles being raw materials for his manufacturing activities is conclusive and binding on the department.
Ratio Decidendi: The Court relied on the decision in Bowen Press vs. State of Maharashtra [1977] 39 STC 367 (Bom) to hold that the entry in the registration certificate of the dealer-assessee that hydrochloric acid is a raw material for the manufacture of radiators is conclusive and binding on the department. The Court further held that the penalty under Section 5C(2) of the Act could not be imposed on the dealer-assessee as there was no contravention of the conditions attached to the concession that was made available to it under Section 5C(1) of the Act.
Final Decision: The Court dismissed the application under Section 15(2)(b) of the Rajasthan Sales Tax Act, 1954, as substituted by the Amendment Act, holding that no penalty was leviable under Section 5C(2) of the Act on the dealer-assessee.
S.K. Mal Lodha, J.-This is an application under Section 15(2)(b) of the Rajas-than Sales Tax Act, 1954 (No.29 of 1954) (for short “the Act”), for directing the Board of Revenue for Rajasthan at Ajmer (hereinafter referred to as “the Board”) to state the case and refer the following question of law, arising out of the order dated 18th June, 1982, passed in Special Appeal No. 1/80/ST/JTJ which the Board refused to refer by its order dated 5th November, 1982, on the application under Section 15(1) of the Act. Whether, under the facts and circumstances of the case, learned single Bench and double Bench were right in setting aside the penalty imposed under Section 5C(2) only for the reason that the assessing authority did not cancel the entry in R. C. whereas dealer has contravened the provision of Section 5C(1) and misused the declaration?
2. Non-petitioner No. 1 (dealer-assessee) is a partnership firm carrying on the business of manufacture of motor radiators, etc., and is a registered dealer under the Act. The period involved is 1st January, 1970, to 31st December, 1970. The dealer-assessee purchased hydrochloric acid (tejab) worth Rs. 3,283.43 by giving a declaration that this acid is a raw material for manufacturing of radiators by it and, therefore, he is entitled to pay to the seller concessional rate of tax at the rate of 1 per cent as provided by Section 5C(1) of the Act. The Commercial Taxes Officer (C. T. O.), Special Circle, Jodhpur, by his assessment order dated 6th December, 1972, for the period 1st January, 1970, to 31st December, 1970, was of the opinion that hydrochloric acid is not a raw material for the manufacture of radiators within the meaning of “raw material” as defined in Section 2(mm) of the Act and, therefore, the dealer was not entitled to the concessional rate of tax at the rate of 1 per cent. The assessing authority, therefore, imposed penalty of Rs. 350 under Section 5C(2) of the Act. The dealer-assessee filed an appeal against the order dated 6th December, 1972, imposing penalty of Rs. 350. The Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, by his order dated 17th July, 1975, disagreed with the assessing authority, accepted the appeal and deleted the penalty of Rs. 350. The C. T. 0., Special Circle, Jodhpur, filed a revision before the Board. A single Bench of the Board dismissed the revision on 6th February, 1980. A special appeal was lodged by the assessing authority. The Division Bench of the Board dismissed the special appeal by its order dated 18th June, 1982. The reason given by the Division Bench was that since in the case of this very assessee in Revision No. 418/75/ST/JTJ for an earlier year, the Board by its order dated 15th June, 1979, held that hydrochloric acid is a raw material for the manufacture of the radiator and as such the point that is agitated that hydrochloric acid is a raw material for the manufacture of radiator, cannot be investigated as the finding recorded in the earlier years on this very question operates as res judicata against the assessing authority. The other finding, which is material for the disposal of this
application, is as follows: we are of the view that the entries in the registration certificate of a manufacturer about certain articles being raw materials for his manufacturing activities are conclusive and any modification thereof can only be made by the competent authority after following the prescribed procedure and it is not open to the taxing authorities to conclude that certain articles, though mentioned as raw materials for the manufacturing activities of the assessee in the registration certificate, are not raw materials. Apart from this general position, the present assessee had been dragged to various Courts on the same ground earlier and the findings have been conclusively against the department.
3. The assessing authority submitted an application under Section 15(1) of the Act, which was rejected by order dated 5th November, 19
