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TMI Blog1984 (11) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee was not entitled to a set-off under rule 41-A of the Bombay Sales Tax Rules, 1959 to the extent proportionate to the scrap which was resold by the assessee. The Sales Tax Officer worked out the quantity of resale as 11%. Hence he disallowed set-off under rule 41-A proportionately which worked out to a "magnificent" sum of Rs. 165. The first appeal from this order of the Sales Tax Officer was rejected. In the second appeal before the Tribunal, the Tribunal held that the assessee was entitled to the full permissible set-off under rule 41-A of the Bombay Sales Rules, 1959. It, therefore, held that the lower authorities were not justified in reducing the set-off. From this decision of the Tribunal, the following question h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The remnants of raw material so purchased and used in the manufacture of taxable goods have been sold by the assessee. These sales are considered as "resales" by virtue of the definition of the word "resale" under section 2(26) of the Bombay Sales Tax Act, 1959 at the relevant time. Under section 2(26)(iii), "resale", inter alia, means a sale of purchased goods "being goods specified in any entry in Schedule B, without doing anything to them which takes them out of the description thereof in that entry, and the word 'resale' shall be construed accordingly". The remnants of iron and steel sheets also form a part of entry 3 in Schedule B which deals with, inter alia, steel scrap. With the result that the sale of these remnants are considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be used up in the manufacture of taxable goods for sale and there should not be any waste product at all. We have not been shown any authority which would support such a proposition. This was the only argument which was advanced before us. We do not see any reason for interpreting rule 41-A in this fashion. 4.. In the case of Commissioner of Sales Tax v. Burmah Shell Refineries Ltd. reported in [1978] 41 STC 337 a Division Bench of this High Court was required to consider a case where the respondents had claimed a set-off in respect of the tax collected from them for the purchase of sulphuric acid. The acid was used by the respondents in the manufacture of refined kerosene. There was also a byproduct, namely, acid sludge, which was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire quantity of goods purchased have been used in the manufacture of taxable goods for sale; but certain remnants which cannot be so used are sold as scrap. Before the Tribunal it was contended on behalf of the applicant that if these remnants had been thrown away, then the assessee could have claimed a full set-off. But because the remnants have been "resold" the assessee is not entitled to a full set-off. This argument does not have any basis in the provisions of rule 41-A. For the purpose of rule 41-A we have to see whether the goods purchased have been used in the manufacture of taxable goods for sale. For this purpose we have to see whether the entire quantity so purchased has been utilised fully to the extent possible in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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