1954 (3) TMI 49

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..... The assessees are registered manufacturers of groundnut oil. They purchased groundnuts and extracted oil from them but sold the oil out- side the State, i.e., in Bombay. They were taxed on the turnover of the purchase price. They now claim that, as the oil was sold outside the State, and as that sale is exempted from taxation under Article 286 of the Constitution, they are entitled to claim a re .....

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..... turnover on which the assessment is levied. That is clear from the opening words of rule 5. The object, therefore, of rule 5 is to arrive at the taxable net turnover. To determine the net turnover, certain deduc- tions are allowed under that rule, and sub-rule (k) of rule 5(1) relates to the groundnuts and groundnut oil. Rule 18(2) provides: "Every such manufacturer shall be entitled to a deducti .....

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..... e purchase price of the groundnuts, he should not again be called upon to pay the tax. For that purpose and in order to avoid double taxation on the same commodity this deduction is allowed. All this, of course, is on the assumption that otherwise the entire turnover of the sale of the oil would be liable to tax. If the assessees were exempted from paying tax on the sale turnover of the oil as the .....

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