The court held that the petitioner did not falsely represent the goods as covered by his Certificate of Registration, thus the penalty was not warranted.

1The petitioner is the General Manager of the Kannan Devan Hills Produce Company, Ltd., Munnar, which owns several tea estates around Munnar. Its business is "the cultivation, manufacture and sale of tea" produced in its estates, each estate having a factory or factories for the purpose.

2 Under S.6 of the Central Sales Tax Act, 74 of 1956, hereinafter called the Act, every dealer is liable to pay a tax under the Act on all the sales effected by him in the course of inter State trade or commerce.
Under S.7 every dealer liable to pay tax under the Central Act must, and any dealer liable to pay tax under a State Act may, apply for registration under the Central Act; and, if the authority is satisfied that the application is in order, the applicant will be given a Certificate of Registration specifying the classes of goods in respect of which sales tax will be levied at the concessional rate of 1 per cent only; and such certificate may be amended or cancelled on sufficient reason by the issuing authority.
The effect of Sub-s.(1) of S.8, read with sub-s.(3) is that, if the buyer be a registered dealer, and the goods be not of a class declared in S.14, the concessional rate of sales tax at 1 per cent can be availed only in respect of goods of the class or classes specified in the purchaser's Certificate of Registration as being intended "for use by him in the manufacture or processing of goods for sale ...... or in the generation or distribution of electricity or any other form of power" and in respect of containers or other materials for the packing of the goods for sale or their containers as specified in the Certificate; and sub-s.(2) provides that in respect of other non declared goods, the sales tax shall be at the rate of 7 per cent of the turnover or at the rate leviable under the State Act, whichever is higher.
S.10 enacts, inter alia, that, if any person being a registered dealer falsely represents when purchasing goods that the same are covered by his Certificate of Registration, or after purchasing goods for a purpose specified in the Certificate fails, without reasonable excuse, to make use of the goods for such purpose, he shall be liable to simple imprisonment for six months and fine; and S.10A empowers the authority issuing the certificate to impose upon him a penalty, in lieu of prosecution, not exceeding one and a half times the tax which would have been leviable under the Act, if the offence had not been committed.

3 The petitioner has been given a Certificate of Registration under S.7 of the Act, which is Ext. P. 1 here, valid from July 1, 1957. The classes of goods specified therein for the purposes of sub-s.(1) of S.8 are :

It may at once be noted that, after the amendment by Act XXXI of 1958, the last category, viz., those specified for use in the execution of contracts, has become unauthorised by the deletion of the relevant provision from the Act, and must therefore be ignored for all legal purposes, as the Certificate cannot override the provisions of the concerned statute. But that does not affect the question here as the goods to which the present proceedings relate come admittedly within the category (b) in the Certificate.

4 On September 7, 1962, the respondent, the Sales Tax Officer, Devicolam, issued a notice (Ext. P. 3 here) to the petitioner apparently under S.7(4) of the Act, stating that the Certificate of Registration granted to the petitioner requires amendment as "Many goods which you are not eligible to purchase at concessional rate are included in the certificate", proposing to amend the specification of goods therein as

and calling upon the petitioner to file his objections, if any, on or before September 25, 1962. The petitioner has filed his reply thereto on October 11, 1962; and the matter is pending decision thereon.

5 On October 17, 1962, the respondent has issued to the petitioner another notice (Ext. P. 5 here), with "enclosures Parts I to XXII" being sorted lists of goods purchased by the pe