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TMI Blog1977 (1) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... , sales of the value of Rs. 50,000 were effected to the registered dealers who held recognition granted by the Commissioner of Sales Tax and against declarations in form 15 to the Bombay Sales Tax Rules, 1959, given by such purchasers. In respect of the remaining sales of the aggregate value of Rs. 3,42,208, the applicants claimed a deduction as resales under section 10(2)(i) of the said Act. This claim of the applicants was rejected. According to the applicants, they had paid a sum of Rs. 8,693.88 by way of sales tax and Rs. 7,568.52 by way of general sales tax to Aurobrite (India) Private Limited. In support of this claim, the applicants filed with the Sales Tax Officer, in the course of assessment proceedings, statements issued by the said Aurobrite (India) Private Limited showing the amount of sales tax and general sales tax recovered by the said company as also a letter from it stating that it had remitted the amounts so recovered by it to the Government authorities. The applicants also produced another letter from the said Aurobrite (India) Private Limited giving the date and the number of the receipted challan by which the said amounts were thus paid over by the said Aurobri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Bench of three Members of the Tribunal held that rule 42 of the said Rules had to be read together with the said rule 45 and that clause (c) of subrule (1) of rule 45 was decisive of the matter, because under that clause, the amount of tax recovered from a dealer had to be shown separately in the bill or invoice given to him by his vendor. The Tribunal further held that in the 1966 Edition of the Bombay Sales Tax Rules, 1959, the said clause was shown as being under sub-clause (iii) of clause (B), but that appeared to be a misprint and that it was a separate clause by itself like clauses (A) and (B), which preceded. In dismissing the second appeals of the applicants, the Tribunal followed this decision of the Special Bench in Ramprasad Murlidhar v. State of Maharashtra (Second Appeals Nos. 298 and 299 of 1966). In order to arrive at a correct interpretation of rules 42 and 45 of the said Rules, it is necessary to see the scheme with respect to the grant of drawback, set-off or refund as contained in the said Rules. The provisions with respect to the grant of such drawback, set-off or refund are contained in Chapter VII of the said Rules. These rules have been amended time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase price of the goods; (e) the amount of purchase tax, if any, paid or payable by him in respect of the goods purchased; (f) the amount of sales tax or general sales tax, if any, recovered from him by the selling dealer; (ii) in the case of goods in respect of the purchase of which tax has been recovered from the claimant dealer or is payable by him as purchase tax under an earlier law, maintained a true account in chronological order of the goods so purchased and held by him on the appointed day, which shall show the particulars mentioned at (a) to (e) above, and the amount recovered under each of the earlier laws separately; and (iii) in the case of goods held in stock on the commencement of the appointed day, furnished to the Sales Tax Officer, on or after the appointed day but before the 26th March, 1960- (a) where the selling dealer has recovered from him any amount by way of tax under any earlier law, a statement in form 32, and (b) where the selling dealer has not recovered from him any amount by way of tax under any earlier law, a statement in form 32-A duly signed and verified by him or by a person authorised by him; (c) unless in the original bill/invoice/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, on such purchase, the dealer had "recovered from the assessee any tax under such earlier law". Clause (a) of sub-rule (3) of rule 40 deals with a case where "the selling dealer has not separately recovered" from the assessee any tax under section 8 of the Bombay Sales Tax Act, 1953. Similarly, rule 40-A, which deals with drawback, set-off or refund of tax for certain goods held in stock on 14th March, 1960, uses the word "recovered", and so does rule 40-B which deals with drawback, set-off or refund of tax for country liquor and foreign liquor held in stock on 17th December, 1964, or 1st July, 1965. Rule 40-B also deals with a case where the registered dealer from whom the liquors were purchased "did not recover" from the assessee any amount by way of sales tax or general sales tax. Rule 41 deals with drawback, set-off or refund of tax paid by a manufacturer in respect of his purchases up to 15th July, 1962. Clause (a) of the said rule 41 uses the expression "recovered", while clause (aa)(iii) uses the expression "has not separately recovered". Similarly, clause (c)(ii) uses the expression "has not separately recovered " and so does clause (cc)(iii), while clause (e) uses the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for drawback, set-off or refund of general sales tax on goods purchased by a licensed dealer in respect of the amount of such general sales tax recovered from him on the sale to him of goods other than declared goods specified in Part II of Schedule B to the said Act in cases where the purchasing licensed dealer has not furnished to his vendor a certificate under section 12. This rule does not contain any specific provision like in rules 41(aa), 41(c), 41-A and 43(1)(a)(ii) providing for a lesser amount of drawback, set-off or refund in cases where general sales tax has not been recovered separately. Relying upon this fact, Mr. Sanghavi, the learned counsel for the respondents, submitted that since the other rules mentioned above specifically provided for grant of drawback, set-off or refund where sales tax had not been recovered separately as also where sales tax had been recovered and shown separately in the bill or invoice, the operation of the word "recovered" in rule 42 must also be confined to cases where general sales tax had been "recovered separately", and since there was no provision in the said rule 42 for granting any drawback, set-off or refund in cases where general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls the goods after the expiry of that period he might find himself in the position of having charged with having given a false certificate with the consequences attaching thereto. In such cases, a licensed dealer would prefer not to purchase goods against certificate so that the dealer, who is the vendor, would recover from the licensed dealer who is purchasing the goods the amount of tax, because the turnover of such sales is not to be deducted from the vendor's turnover of sales. In the normal course, when the purchasing licensed dealer resells these goods he would add to the price the amount of tax which has been recovered from him by his own vendor. This would put up the price of goods. In order that the prices of goods may not be so increased, rule 40 provides for drawback, set-off or refund of the amount of general sales tax recovered from a licensed dealer by his own vendor. The sole question Is whether the meaning to be given to the word "recovered" is to be cut down by a reference to the other rules in which a marginally lesser amount of drawback, set-off or refund is provided in cases where the amount of tax has not been separately recovered. We see no reason why this sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the two words "collected" and "recovered" as used in the Bombay Sales Tax Rules, 1959, and we may mention that the learned counsel for the respondents informed us that even the officers instructing him had not been able to point out any difference. We will now turn to rule 45 by reason of which the taxing authorities and the Tribunal have held that the applicants are not entitled to any relief. Rule 45 is a rule which lays down conditions for grant of drawback, set-off or refund. It expressly refers to drawback, set-off or refund "under these Rules". Therefore, rule 45 prescribes general conditions, which are to be read into each and every rule. Both the taxing authorities and the Tribunal have proceeded upon the basis that sub-clause (c) before the proviso to rule 45(1) is a separate condition. Rule 45 provides that no drawback, set-off or refund under the Rules is to be granted to a dealer in respect of any amount of tax recovered from him or of tax not collected from him separately or payable by him on the purchase of any goods unless the conditions set out in that rule are complied with. The first condition is numbered (A). It is that the registered dealer claiming such d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich states: "Provided that the Commissioner shall not reject the evidence of any such account only for the reason that the particulars of each transaction have not in all cases been maintained in chronological order, if the failure of the claimant dealer so to enter them was due in the opinion of the Commissioner to a reasonable cause." The phrase "any such account" in the said proviso refers to the account required to be maintained by condition (B). If paragraph (c) was a separate condition, the proper place for the proviso would have been at the end of condition (B), that is, after clause (iii)(B). It could have never come after the clause which deals not with the maintenance of accounts but with the production of original bill, invoice or cash memorandum. The position in which paragraph (c) occurs clearly makes it a part of clause (iii) of condition (B), and, on reading the whole of condition (B), it is clear that what is sought to be done by this sub-clause (c) is that a statement in form 32 and form 32-A are not required to be filed if in the original bill, invoice or cash memorandum of the selling dealer the amount of the sale price of the goods and the amount recovered by w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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