Commissioner Vs K M C Construction (Allahabad High Court)
The Allahabad High Court dismissed a revision filed against the Commercial Tax Tribunal’s order deleting a penalty imposed under Section 10-A of the Central Sales Tax Act, 1956. The assessing authority had levied the penalty on the ground that the dealer falsely represented tyres and tubes as items covered under its registration certificate. However, the Tribunal found that the registration certificate explicitly included “spare parts and machinery” at Serial No. 38, and tyres and tubes were reasonably covered within this category. The High Court agreed, holding that once the registration certificate itself mentions spare parts, the dealer’s purchase of tyres and tubes could not be treated as a misrepresentation. Consequently, the Tribunal’s decision to set aside the penalty was upheld. The Court concluded that no illegality existed in the Tribunal’s findings and dismissed the revision, answering the substantial questions of law against the revenue.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the parties.
2. By means of present revision, the revisionist is assailing the order dated 22.8.2023 passed by Commercial Tax Tribunal, Allahabad in Second Appeal No. 5/2023 (2009-10).
3. The present revision was admitted vide order dated 15.2.2024 on the substantial questions of law nos. (i) and (ii) as mentioned in the memo of revision, which is quoted below:-
“(i) Whether on the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in affirming the order dated 18.10.2022 passed by the First Appellate Authority by which the order of penalty passed under Section 10-A for the offence enumerated in Clause (b) of Section 10 of the Central Sales Tax Act, 1965 by the Assessing Authority was set aside despite the fact that the dealer was guilty of falsely representing that “Tyres and Tubes” purchased are covered under the certificate of registration?
(ii) Whether on the facts ad circumstances of the case, the Commercial Tax Tribunal was legally justified in treating that “Tyre and Tubes” are included in the item No.40 of the list mentioning therein “All Other Equipment, Vehicles and machinery required for the construction of Allahabad Bypass Project-3″ attached with grant of Registration Certificate under Section 7 of the Central Sales Tax Act, 1956?”
4. Learned ACSC for the revisionist submits that in the garb of registration under the Central Sales Tax Act, the revisionist purchased tyre and tube, which is not specifically mentioned in its registration granted under the Act, therefore, penalty has wrongly been deleted.
