STATE OF TAMIL NADU vs KODAIANAL MOTOR UNION (P) LTD.

The Supreme Court held that under Section 10A of the Central Sales Tax Act, 1956, the penalty for misuse of goods purchased under 'C' form certificates must be calculated based on the normal tax rate applicable under Section 8(2) rather than the concessional rate. The Court clarified that the penalty should reflect the tax that would have been levied had the offence not occurred, emphasizing that the undertaking in the 'C' form must be fulfilled to avoid penalties. The decision of the Tribunal was overturned, and the Revenue's appeal was allowed, establishing the correct method for determining penalty quantum.