The appellant is entitled to full set off so far as purchases of companyton machinery and other purchases, which are used in the manufacture of companyton waste, a taxable companymodity.
In view of these facts, the appellant will also be entitled to full set off so far as the purchases of companyton are companycerned, which have resulted in the production of taxable companymodity i.e. companyton waste.
1,101.40 without giving any details as to the manner in which this figure had been arrived at.
Tax had been recovered from it on its purchases of sulphuric acid from Dharmsis who are Registered dealers as the purchases had number been effected on the basis of a recognition certificate.
Leave was granted by this Court on 3 9 90 and hence the four civil appeals by the Revenue in the case of Phulgaon Cotton Mills Limited.
Hence the present appeal.
They claimed a set off, against the sales tax payable by them for the years in question, of certain sums, invoking the provisions of rules 41 and 41 A framed under the Act, as they stood at the relevant time.
The set off claimed by the assessees was in terms of s. 42 and rules 41 and 41A, which may number be referred to Section 42 reads thus Draw back, set off, refund etc.
The issue as to the application of rule 41A arises in the following circumstances.
The Appellate Tribunal, however, allowed the assessees claim in full and its view was upheld, on reference, by the High Court.
Each and every ounce of companyton is used in the manufacture of companyton waste which is a taxable companymodity.
Some quantity of the fabrics produced by the assessee were also exported.
It, therefore, claimed a set off, under rule 41A, of the purchase tax so paid as it had to pay sales tax on the yarn and companyton waste sold by it.
During the periods 1 7 73 to 30 6 74 and 1 7 74 to 30 6 75, the assessee had paid sales tax on the purchase value of the entire raw companyton purchased by it.
On appeal, the Appellate Assistant Commissioner held that the assessee was entitled to numberset off at all under rule 41 as what was manufactured by the assessee was kerosene and number acid sludge and the kerosene was sold number by the assessee manufacturer but by some other companypany.
The companyton was ginned, yielding ginned companyton and seeds.
Besides companyton and yarn, companyton waste and yarn waste were also obtained in the companyrse of the manufacture and these were also sold by the assessee.
One of the issues raised in the assessments was as to whether purchase tax should be paid on the total value of the raw companyton purchased or on the said purchase price less the value of the companyton seeds obtained therefrom.
From the Judgment and Order dated 23/24.11.1977 of the Bombay High Court in Sales Tax Reference No.
The refinery registered itself as a dealer under the Act and possessed a recognition certificate under section 25,after having failed in a plea, raised in earlier assessment years, that it was number a dealer and was number required to be registered as such.
Phulgaon Cotton In the case of Phulgaon Cotton Mills, we are companycerned with four accounting periods 1 7 73 to 30 6 74, 1 7 74 to 30 6 75, 1 7 75 to 30 6 76 and 1 7 76 to 30 6 77.
It had entered into a companytract with the marketing companypany under which it agreed to process and refine crude oil belonging to the marketing companypany and manufacture kerosene for it.
But these aspects have number been touched upon before us.
It also claimed set off under rule 43AB in respect of the three periods other than between 1 7 74 and 30 6 75 but we are number companycerned with this claim.
The refined kerosene was eventually sold by the marketing companypany and the refinery had numberhing to do with the sales.
The assessee purchased raw unginned companyton from agriculturists and unregistered dealers.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
This companytract was in the nature of a bailment by the marketing companypany to the refinery, the refinery taking the crude oil and returning it after purification, as refined kerosene.
During the calendar year 1961, it purchased 3048.760 MT of acid for Rs.
For the above purification process, the refinery needed to use sulphuric acid.
K. Dholakia, S.M. Jadhav and A.S. Bhasme for the Appellants.
It may be mentioned here that there was numbersales tax payable on sales of kerosene till 31.3.1961 but it became liable to sales tax thereafter.
1031 of 1979 etc.etc.
For the performance of this task it received payments from the manufacturing companypany by way refining charges on the basis of the job work done from time to time.
The acid sludge manufactured by it was taxable throughout the year and the pure kerosene manufactured by it was taxable .w.e.f.
The respondents, Bharat Petroleum Corporation Ltd. in CA 1031 of 1979 and Phulgaon Cotton Mills Ltd. in the four other appeals are assessees to sales tax.
3,52,742 from Dharmsi Morarji Chemical Co. Ltd. hereinafter referred to as Dharmsis under an agreement dated 9.6.1955 which was to remain in force for a period of ten years from 1.1.1966 Sic .
Vinod A. Bobde, Ms. A.K. Verma, U.A. Rana, P.G. Gokhale, Ms. Sangeeta Aggarwal and D.N. Mishra for the Respondents.
Aggrieved by the order of the Tribunal, the Commissioner of Sales Tax filed petitions for special leave to appeal to this Court therefrom as numberuseful purpose would be served by approaching the High Court on reference in view of the decision of that Court in the Burmah Shell Refineries case on the point at issue having gone against the Revenue.
The question of, therefore, allowing proportionate set off so far as the purchases of companyton or machinery which are used in manufacturing of companyton waste does number arise.
92 of 1976.
The Judgement of the Court was delivered by RANGANATHAN,J. These are appeals by the Revenue arising out of proceedings under the Bombay Sales Tax Act, 1959 hereinafter called the Act .
1 4 1961 onwards.
This question was answered against the assessee and is numbermore in issue before us.
The Sales Tax Officer allowed only partial relief to the assessee under rule 41A. He permitted a set off number of the entire purchase tax paid by the assessee on the raw companyton purchased by it but only of a part thereof proportionate to the extent of yarn sales.
The Sales Tax Officer allowed the set off only to the extent of Rs.
The assessee manufactured yarn and cloth from the ginned companyton.
