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TMI Blog1995 (2) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 16 of 1985 and 17 of 1985 is M/s. National Plastic Industries and in S.T.R. Nos. 18 of 1985 to 20 of 1985 is M/s. Nilkamal Plastic Allied Industries. The controversy in all these references relates to different periods between August 8, 1974 to August 9, 1977. Both the assessees are manufacturers of plastic household articles and the controversy pertains to quantification of the amount of set-off allowable under rule 41A of the Bombay Sales Tax Rules, 1959 ("the Rules"). As the facts of all the cases are identical, the Tribunal has only set out the facts of the case of Nilkamal Plastic Allied Industries (hereinafter, for the sake of convenience, referred to as "the assessee") in Appeal No. 83 of 1979 which pertains to period from November 14, 1974 to November 3, 1975. We shall, therefore, refer to those facts only. During the above period, the assessee had purchased goods amounting to Rs. 23,75,414 on which the vendor had charged general sales tax chargeable under the Bombay Sales Tax Act, 1959 ("the Act") separately which amounted to Rs. 70,729. Certificate was also issued in form No. 32 by the vendor to the assessee covering the entire sales of Rs. 23,57,414. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rules which, so far as relevant, read as follows: "41A. (1) Drawback, set-off, etc., of tax paid by a manufacturer in respect of purchases made on or after the 15th July, 1962.-In assessing the amount of tax payable in respect of any period by a registered dealer who manufactures taxable goods for sale or export (hereinafter in this rule referred to as 'the manufacturing dealer'), the Commissioner shall, in respect of the purchase made by such dealer on or after the 15th July, 1962 of any goods specified in Schedule B, C, D or E and used by him within the State in the manufacture of taxable goods for sale or export or in the packing of goods so manufactured for sale or export, grant him a drawback, set-off or, as the case may be, a refund of the aggregate of the following sums, that is to say- (a) a sum recovered from the manufacturing dealer by other registered dealers by way of sales tax, or general sales tax or, as the case may be, both, on the purchase by him from such registered dealers, when the manufacturing dealer did not hold a recognition or when he held a recognition but effected the purchase otherwise than against a certificate under section 11 of the Act; (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, on payment of reduced rate of tax as was provided in subsection (1A) of section 11 then existing by furnishing the certificate in form 15, if the manufacturing dealer shows to the satisfaction of the Commissioner (i) that the said goods were resold by the said registered dealer to him after purchasing them from another registered dealer on or after the 1st day of January, 1960, (ii) that the sales tax leviable under section 10 has been paid or has become payable on an earlier transaction in respect of the same goods, (iii) that the said registered dealer has not separately recovered sales tax in respect of the said goods from the manufacturing dealer, and (iv) that the said goods have actually been used by the manufacturing dealer within the State in the manufacture of taxable goods which have in fact, been sold by him and not given away as samples or otherwise, or which have been exported by him or used by him in the packing of goods so manufactured and produces a certificate in form 31 in respect of purchases made on payment of general sales tax, or as the case may be, in form 31-A in respect of purchases made against the certificate in form 15, issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 per cent of the purchase price in respect of the purchases made representing these sums" appearing in the second proviso to the said rule. According to the Revenue, it means 3 per cent of the purchase price in respect of which the amount of drawback, set-off or refund has been calculated in clauses (a), (b) and (c). The contention of the Revenue, in other words, is that purchase price, for the purpose of rule 41A as also for the purpose of the second proviso thereto, means the purchase price as defined in clause (22) of section 2 of the Act. The contention of the counsel for the assessee, on the other hand, is that purchase price for the purpose of the second proviso to rule 41A would mean the "real purchase price" which can be arrived at only after reducing therefrom the element of profit and sales tax comprised therein. The case of the assessee in other words is that a deduction of 10 per cent should be made from the purchase price to take care of the element of profit comprised therein and thereafter a further deduction should be made to take out the element of sales tax therefrom and 3 per cent should be calculated on the amount so determined after making the above deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the one given in the definition clause is not only unwarranted but might make the rule itself unworkable. We do not find anything in the second proviso to the said rule, which in clear terms provides for deduction of 3 per cent of the purchase price, to suggest that the expression "purchase price" used therein means something different than the one defined for the purpose of the Act and the Rules in clause (22) of section 2 of the Act. This opinion of ours also gets support from the fact that wherever the rule-making authority intended that the purchase price should be reduced for any purpose, it has specifically said so, as in clause (c) of rule 41A itself by introducing a formula which in effect reduces the purchase price to 9/10th thereof. So far as the question whether the definition of "purchase price" contained in clause (22) of section 2 of the Act would include sales tax or not is concerned, it is no more res integra in view of the decision of the Supreme Court in George Oakes (Private) Ltd. v. State of Madras [1961] 12 STC 476 and a catena of cases thereafter where it has been held that the sales tax payable by a dealer, whether included in the price or added to it as a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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