Back
1964 Supreme(Raj) 73
Board of Revenue
Khemchand & R.N. Madhok, Members On difference referred to Shri S. D. Ujjwal, Chairman
Jaipur Udyog Limited, Sawai Madhopur - Appellant
Versus
State of Rajasthan - Respondents
Revision No. 28/Sawai Madhopur of 1962
Decided On : April 07, 1964
S.K. Kapur, for Applicant; G.C. Kasliwal, Advocate General
Headnote:(a) Sales Tax Act (Central) Sec. 8(1)—Obtaining goods for manufacture, and manufacture not one and same thing—Assessee holding preferential rate certificate in respect of goods required for manufacture of cement not entitled to preferential rate in respect of machinery needed to prospect and transport raw material from mine to factory.(b) Sales Tax Act (Central) Sec. 10(b)—False representation sufficient to attract penal consequences—Intention not material.
Per Shri Ujjwal and Shri Madhok—Processes adopted in the manufacture of cement have to be differentiated from the processes required for obtaining, transporting and making available raw material for the purpose of manufacture, if some complicated and absurd results are to be avoided. If the manufacture of an article is deemed to include mining of raw material, it is difficult to draw a line from which manufacture can be said to start and the time at which it ends. The expression in the manufacture has necessarily to be deemed to be restricted to the processes of converting lime stone into cement. It cannot be said that the preferential rate is available to it in respect of the bull dozers, dumpers and tipping wagons in question.
Per Shri Ujjwal and Shri Madhok—Sec. 10(b) of the Act nowhere enjoins an enquiry for ascertaining whether the intention were malafide or not. What has to be found out is whether there was any false representation by the dealer at the time of purchase. If there was a false representation the provisions of sec. 10(b) would be attracted and no amount of argument by the dealer that his intention was not malafide will be of any avail. The applicant purchased the goods in dispute by representing that these goods are covered by his certificate of registration. These goods are not required in the manufacture of cement and as such the contention that they are covered by the certificate is false. Then the goods were purchased at concessional rate by this false representation which makes the applicants act sufficient to attract the provisions of sec. 10(b) of the Act. It is not that penalty can be imposed only if the representation is made with malafide intentions. An assessee cannot appropriate a concession by interpreting a fiscal statute to his own benefit and simultaneously escape the consequences (penalty for evasion) by pleading that there was no malafide intention.
The applicant doing business under the name and style of the "Jaipur Udyog Limited* is registered u/s. 7 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act.) In the certificate of registration the business of the applicant was shown as "wholly manufacture of Cement" and the place of business is shown as Sawai Madhopur. According to this certificate the applicant is entitled to pay tax for his purchases in the course of inter-state trade at the preferential rate of 1% prescribed in sec. 8(1) of the Act in respect of certain goods required for use in manufacture that have been specified in the certificate. The relevant item for the purpose of deciding this revision is "machineries". The goods in respect of which the preferential rate of tax is available have been described in sec. 8 sub-sec. (3) cl. (b) of the Act which is reproduced below :—
In the case of goods other than declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him... ... ... ...or subject to any ruler made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining of in the generation or distribution of electricity of any other form of power".
The learned Sales Tax Officer held that the applicant was not entitled to a preferential rate of tax in respect of his purchases of dumpers, bull-dozers and tipping wagons used for quarrying lime stone at the quarries owned by the applicant or for transporting the lime-stone so quarried. His reason was that the applicant is registered only as a manufacturer of cement, that the quarries owned by the applicant are far off from the applicants cement factory and that it cannot be said that the quarrying of lime-stone and its transportation take place "in the manufacture" of cement as contended by the applicant. The learned Sales Tax Officer, therefore, assessed the difference between the preferential rate at which tax had been paid and the ordinary rate at which the tax according to him have been paid, and also imposed a penalty in the like amount under sec. 10-A of the Act. In appeal the learned Deputy Commissioner modified the order of the learned Sales Tax Officer in so far as penalty had been levied under sec. 10-A of the Act in respect of the applicants purchases before 1.10.1958 from which date sec. 10-A was brought into force. In all other respects the appeal was rejected.
It has been urged before us by the learned counsel for the applicant, firstly, that bull-dozers, dumpers and tipping wagons are " machineries" used in or in the process of manufacture of cement, and, secondly, that no false representation within the meaning of sec. 10(b) of the Act was involved in the purchases of bull dozers, dumpers and tipping wagons on payment of the preferential rate of tax. He has admitted before us that the quarries of the applicant are situated in village Phalodia about ten miles away from the applicants cement manufacturing plant at Sawai Madhopur, and, further, that while the bull-dozers, and dumpers are used in the process of quarrying the limestone, the dumpers and tipping wagons are employed for carrying the lime-stone to the rail head from where it is transported to Sawai Madhopur. There is no doubt that bull-dozers and dumpers are machineries in that these are mechanically operated. In common pat lance these are known as earth-moving machineries. The tipping wagons are also mechanically operated and propelled and must be construed to be "machineries". The question is whether these machineries are employed "in the ma
