Judgment :- JANARTHANAM, J. This appeal, at the instance of the assessee, is directed against the order of the Joint Commissioner-II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5, passed in suo motu revision proceedings in Ref. No. Q2/3047/81 dated June 19, 1985, setting aside the order of the Appellate Assistant Commissioner (C.T.) (Full Additional Charge), Tirunelveli, made in Appeal No. CST 4181 dated May 28, 1981 and thereby restoring the order of the Deputy Commercial Tax Officer, Palayamkottai in his proceedings in CST No. 9672/77-78 dated December 8, 1980. 2. Thiru K. S. Raman, proprietor, M/s. Hufdozers, having his place of business at No. 1, Bungalow, Shankar Nagar, Tirunelveli, is a registered dealer under the Central Sales Tax Act, 1956 (for short, "the CST Act"). He applied for registration on January 30, 1978 to purchase and use bulldozers, tractors and other spares for the machineries for removal of limestones and other minerals from earth. The application so made, was forwarded with the certificate of registration in form "B" by the competent authorities on January 31, 1978. 3. (a) The assessee-dealer, it appears, on January 6, 1978 entered into some sort of agreement with one Tirunelveli Lime Products, Shankar Nagar, Tirunelveli district, which it is said, was having the requisite mining licence for mining the limestones and supplied the same to the said Tirunelveli Lime Products, for a reasonable remuneration to be agreed between them by acquiring the necessary equipments required for mining. (b) The assessee-dealer, it is said, during the year 1977-78 purchased bulldozers and spares for Rs. 4, 56, 382.08 by issuing "C" form declaration, as he was permitted to purchase and use the bulldozers and tractors for removal of Limestones and other minerals from earth, which was his nature of business. The mining agreement the assessee-dealer entered into with Tirunelveli Lime Products, for some reason or other, was unable to be fructified by the time the bulldozers and tractors were purchased.(c) The assessee-dealer, it is said, was unable to keep the bulldozers and tractors purchased idle and in order to avoid the same being spoiled without user, he, it is said, hired out the bulldozers and tractors for a sister concern, undertaking mining operations of limestones. The bulldozers and tractors had been hired out in such operations till up to December 27, 1979, the date on which the assessee-dealer was able to finalise the agreement he had entered into with Tirunelveli Lime Products for quarrying limestones. Thereafter, it is said, the assessee-dealer utilised the bulldozers and the said tractors for quarrying or mining limestones for the said line products for an agreed remuneration. All these aspects of the matter, we are able to cull out from the files produced for our perusal and consideration. 4. The Deputy Commercial Tax Officer, Palayamkottai, issued a notice dated May 29, 1979 to the assessee-dealer, requiring him to show cause as to why he should not be muleted with liability of penalty under section10-A of the CST Act in lieu of prosecution for infraction or violation of section10(d) of the said Act. In the said notice, he also quantified the penalty in a sum of Rs. 68, 457 equal to one and half times the tax, which would have been levied in respect of the sales made to him. 5. To the notice so issued, the Manager of the assessee-dealer, in his letter, dated June 8, 1979, inter alia, stated that though they have purchased the earth moving equipments for the purpose of mining operations, yet they could not utilise the said equipments, as they were awaiting for an opportunity to do business in lime products and that in order to keep the machines in working condition, they utilised them in their sister and other concerns, by letting them on hire to meet the expenses of maintenance; that they were making arrangements to take mining on lease for quarrying limestones and that, therefore, they requested to drop further action in the matter. The said assessing officer, however, rejected the objections so filed and confirmed the proposal earlier made, in the sense of imposing a penalty of Rs. 68, 457 under section10-A of the CST Act. 6. The aggrieved assessee-dealer perfumed an appeal, as earlier stated, before the Appellate Assistant Commissioner (CT) (Full Additional Charge), Tirunelveli, who in turn, after taking into consideration the materials available on record, allowed the appeal, setting aside the order of the said assessing officer, on the rationale that it cannot be said the assessee-dealer had deliberately acted in contravention of law without any reasonable excuse in letting out the bulldozers for hire. 7. 7. It is this order of the said Appellate Assistant Commissioner that had been set aside in suo motu revision proceedings initiated by the Joint Commissioner II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5, giving rise to the present action. 8. From the pith and submission of Mr. Srikanth, learned counsel, representing Mr. C. Venkat Raman, learned counsel appearing for the assessee-dealer and Mr. S. Sudarsanam, learned Government Advocate (Taxes), representing the Revenue, the question, as below, emerges for consideration Whether the assessee-dealer, on the facts and in the circumstances of the case, after purchasing the bulldozers and the tractors for the purposes for which he was authorised to purchase, failed without reasonable excuse to make use of them for any such purpose ? 9. There is no pale of controversy that the assessee-dealer commenced his business as a new entrant. No doubt before he commenced his business operation, he applied for the issuance of a certificate of registration under the C.S.T. Act. 10. It is an axiomatic proposition of law that since section 7(1) of the C.S.T. Act provides that no dealer shall carry on business in inter-State sales or purchases, unless he is a registered dealer, he must be entitled to apply for and get himself registered even before he enters into transactions of purchase and sale in inter-State sales. Therefore, a dealer, like the assessee in the instant case, in order to be entitled for registration need not have actually commenced business, in the sense of having already entered into a transaction of sale or purchase before he applied for registration. [Vide Venkateswara Commercials and Plastics (P.) Ltd. v. State of Tamil Nadu 1975 (35) STC 598 , 1975 (4) CTR 128 (Mad.)]. 11. It is also an undisputed fact that the machineries, viz., tractors and bulldozers, as earlier indicated, had been purchased to utilise in his business in mining operations by the issuance of "C" forms. [Vide Venkateswara Commercials and Plastics (P.) Ltd. v. State of Tamil Nadu 1975 (35) STC 598 , 1975 (4) CTR 128 (Mad.)]. 11. It is also an undisputed fact that the machineries, viz., tractors and bulldozers, as earlier indicated, had been purchased to utilise in his business in mining operations by the issuance of "C" forms. As indicated elsewhere, the machineries so purchased could not be utilised by him in mining operations, as he was unable to get the contract entered into with Tirunelveli Lime Products fructified and in relation to excavation of limestones, the assessee-dealer therefore, was put to the necessity of utilising the costly machineries and equipments purchased for user by letting them on hire to his sister and other concerns in order to avoid such costly equipments being spoilt or depreciated in value any further. This is the sort of excuse the assessee-dealer would offer for putting the equipments he purchased for a different user. 12. Section 10(d) which is relevant for the present purpose reads as under : "10. Penalties. - If any person, - (a) to (c) ...................... (d) after purchasing any goods for any of the purposes specified in clause (b) or clause (c) or clause (d) of sub-section (3) of section 8 fails, without any reasonable excuse, to make use of the goods for any such purpose (e) and (f) ................. he shall be punishable with simple imprisonment, which may extend to six months, or with fine, or with both; and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues." * 13. The refraction or violation as contemplated by the sanguine provisions adumbrated under clause (d) of section 10 is the user of the goods purchased for any purpose different from the one for which the same had been purchased without any reasonable excuse. To put it differently, the simpliciter refraction or violation of the said clause is not punishable and what is punishable therein is violation or refraction of the said clause without any reasonable excuse. 14. For refraction or violation of the said clause, permissible it is, for the Revenue either to launch prosecution or initiate proceedings for imposition of penalty in lieu of prosecution under section10-A of the C.S.T. Act. 15. 14. For refraction or violation of the said clause, permissible it is, for the Revenue either to launch prosecution or initiate proceedings for imposition of penalty in lieu of prosecution under section10-A of the C.S.T. Act. 15. Sub-section (1) of section 10A, which is relevant for the present purpose is couched in the following terms : "Section 10-A. Imposition of penalty in lieu of prosecution. - (1), If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of section 10, the authority, who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by an order in writing, impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax, which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section : Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section." * 16. In the case on hand, the penalty, which had been quantified in a specific sum by the assessing officer and set aside by the appellate authority, had been restored by the Joint Commissioner II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5. While doing so, the said Joint Commissioner II, did not at all consider the question of the existence or otherwise of any reasonable excuse for the user of the equipments purchased by the assessee-dealer to any purpose other than the one for which they were purchased, as had been specified in the certificate of registration. The rationale or reasoning as stated by him, in his order reads as under : "Admittedly, the quarrying lease has been finalised on December 27, 1979. The machine and spare parts had been purchased during the years 1977-78 and 1978-79. Purchase itself was not warranted during these years before the date, the lease is finalised. On the date of purchase the dealers are not eligible to purchase the machine bulldozers and spare parts. The question of reasonable excuse for diverting the goods for any other purpose does not arise. Purchase itself was not warranted during these years before the date, the lease is finalised. On the date of purchase the dealers are not eligible to purchase the machine bulldozers and spare parts. The question of reasonable excuse for diverting the goods for any other purpose does not arise. Hence the penalty is warranted and the proposal is confirmed and the assessing officer's order is restored. The assessing officer is directed to give effect to this order." * 17. This sort of a reasoning or rationale is quite contra to the dictum laid down in the case of Venkateswara Commercials and Plastics (P.) Ltd. v. State of Tamil Nadu 1975 (35) STC 598 , 1975 (4) CTR 128 (Mad.). As such, there is no other go for us except to reject the reasoning or rationale as given by the Joint Commissioner II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5 for setting aside the order of the Appellate Assistant Commissioner (CT), Tirunelveli. Further, it cannot at all be said, on the facts and in the circumstances of the case, that the assessee-dealer had utilised the equipments purchased for purposes other than the one for which they had been purchased without any reasonable excuse. 18. In that view of the matter, the imposition of penalty upon the assessee-dealer is not at all justifiable, on the facts and in the circumstances of the case. Therefore, the order of the Joint Commissioner-II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5 deserves to he set aside. 19. In fine, the appeal is allowed. The order of the Joint Commissioner-II, Office of the Commissioner of Commercial Taxes, Chepauk, Madras-5, setting aside the order of the Appellate Assistant Commissioner (CT), Tirunelveli and restoring the order of the assessing officer is set aside. No costs.