IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 5TH DECEMBER 2008 / 14TH AGRAHAYANA 1930 WP(C).No. 30238 of 2004(Y) -------------------------- PETITIONER(S): --------------- M/S. TECHNI BHARATHI LTD., FLORANCE 1ST FLOOR, 34/136A, BYE PASS ROAD, EDAPPALLY-24, REPRESENTED BY DEPUTY MANAGER (ACCOUNTS) P. SANKARAN NAIR. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ RESPONDENT(S): --------------- 1. THE SALES TAX OFFICER, O/O. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, THEVARA, ERNAKULAM. 2. THE COMMISSIONER OF COMMERCIAL TAXES, SASTHAMANGALAM, THIRUVANANTHAPURAM. 3. THE SALES TAX OFFICER, 1ST CIRCLE, KALAMASSERY AT EDAPPALLY. BY G.P. SRI.TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF SALES TAX REGISTRATION CERTIFICATE UNDER KGST ACT DT.30.3.94. P2: .DO. CST ACT DT.30.3.94. P3: TRUE COPY OF PENALY ORDER ISSUED BY R1 DT.5.2.99. P4: TRUE COPY OF FIRST REVISION ORDER DT.31.1.2000. P5: TRUE COPY OF REVISION PETITION DT.15.2.2000. P6: TRUE COPY OF REVISION PETITION ORDER DT.7.7.2004. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) No.30238 of 2004 .................................................................... Dated this the 5th day of December, 2008. JUDGMENT Heard Senior counsel appearing for the petitioner and Government Pleader appearing for the respondents. 2. Challenge is against penalty levied under Section 10A of the CST Act for misuse of C Form. The petitioner's case is that being a construction industry, petitioner is entitled to purchase machinery which are earth moving equipments, at concessional rate of tax. However, Government Pleader referred to certificate of registration and pointed out that these items are not covered by certificate of registration. Obviously a construction industry is not entitled to purchase material handling equipments at concessional rate because CST Act does not authorise it. However, I feel this contention is raised by the assessee based on a bonafide mistake. Therefore, the penalty should be limited to the differential tax payable had not the claim been made. It is not known whether the reduction granted by the Deputy Commissioner is to cover only the differential tax. The O.P. is therefore disposed of though in principle upholding the penalty, but with direction to the Assessing Officer to limit the penalty equal to the 2 differential tax saved by the assessee by issuing C Forms, if it is lesser than the penalty sustained by the Deputy Commissioner or otherwise, Deputy Commissioner's order will stand sustained. C.N.RAMACHANDRAN NAIR Judge pms