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TMI Blog1974 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... e opponent-assessee is a dealer registered under the Bombay Sales Tax Act, 1959 (hereafter referred to as the "Act"), and does the business of reselling timber and manufacturing sizes therefrom for sale. During the course of its assessment for S.Y. 2025, the tax which was found payable by it was determined for the assessment year at Rs. 3,771,98. The opponent-assessee had paid up along with the returns the amount of Rs. 1,405. During the course of the assessment it was found that the opponent-assessee was entitled to a set-off under rule 41 of the Rules, of the amount of Rs. 1,872.98. Rule 41 contemplates drawback, set-off etc., of tax paid by the manufacturer on the purchase of goods used for manufacture of taxable goods for sale. Since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 of the Act. " Our answer to this question is in the affirmative for the reasons which follow. 4.. Before discussing the facts of the present reference, it would be proper to refer to a decision given by us in Sales Tax Reference No. 2 of 1973 dated 20th June, 1974 (State of Gujarat v. Sakurbhai Abedbhai[1975] 35 S.T.C. 57., where the question was whether while considering the applicability of the test of the tax assessment exceeding more than 20 per cent of the tax already paid, as provided by sub-section (3A) of section 36 of the Act, the amount of tax paid by the assessee, after filing his return but before the final tax assessment was made, should be taken into consideration or not. In that reference, after considering the necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by him that the set-off which is found due to an assessee is surely not "the sum paid" pursuant to the provisions of section 38 of the Act and, therefore, the amount of set-off which is found due to the assessee cannot be taken into consideration at the time of judging whether the test of 20 per cent deficiency contemplated by subsection (3A) of section 36 is complied with or not. 6.. On a close consideration of the language used by sub-section (3A) of section 36, we find that this contention of Shri Nanavati is not acceptable. It is undoubtedly true that the first two categories of cases contemplated by sub-section (3A) of section 36 do refer to section 38, which provides for the payment of tax along with the returns in the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto: Hattrem v. Burdick, 138 Or. 660, 6 P. 2d. 18,19." These definitions show that if something is accepted as sufficient to discharge a liability, either in full or in part, that amounts to a payment. In case of a set-off which is found due to an assessee for the assessment period in question, it cannot be disputed that the said set-off would work as partially or totally extinguishing the tax liability. If that be so, such a setoff can legitimately be considered as "the sum paid". Since this set-off is always with regard to the sum which is already paid prior to the assessment, we are of the opinion that all the requirements of the third category of cases contemplated by sub-section (3A) of section 36 are satisfied. In our opinion, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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