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TMI Blog2015 (11) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... factured. The set-off is subject to reduction specified in sub-Rule (3). First Appellate Authority was concerned with a set-off on purchases of scientific equipments and other materials which are used for research and development purposes. - set-off can be claimed and granted provided the manufacturer sells the goods manufactured by using the goods purchased and during the assessment year or period in question. It is in that period and if at all the conditions under this sub-rule are satisfied that this set-off is admissible. Once it is found that the goods brought in are not used in the manufacture of goods for sale and which goods have in fact been sold by the dealer or exported by him or in the packing of the goods so manufactured, then, there was no scope for any such set-off. In the case of set-off under Rule 41D of purchase of cement the Tribunal as also the First Appellate Authority found that the cement may have been brought in and purchased for the purposes of strengthening the foundation of the manufacturing plant and the manufacturing plant may have been used in the manufacture of goods sold, still, the cement brought in was not used for such purpose. The cement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First Appellate Authority dismissed the appeal by an order dated 3rd June, 1998. While deciding the appeal, the Appellate Authority reduced the set-off granted in the assessment order by ₹ 31,492/. In the opinion of this appellate authority set-off was wrongly granted on materials used for research and development purposes and thus the order impugned before him was erroneous. However, it confirmed the disallowance of set-off on purchases of goods for scientific research and development. This order of the First Appellate Authority dated 3rd June, 1998 came to be challenged by way of a Second Appeal and which, in terms of the provisions of the Act, was to be filed before the Tribunal. This second appeal was registered as II Appeal No.1320 of 1998. The Maharashtra Sales Tax Tribunal decided the Second Appeal on 16th March, 2002 and maintained the order insofar as refusal of set-off on the purchases effected of goods for research and development. The Tribunal also maintained the order in relation to rejection of the set-off on purchase of cement used in the foundation of plant and machinery. 2. An application was made by the dealer to the Tribunal being Reference Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the order of the First Appellate Authority. 4. In relation to set-off under Rule 41D on purchases of scientific equipments and other materials which are used for research and development purpose, Mr Thakar would submit that the Tribunal has rendered conflicting orders and opinions. He relied upon a recent order dated 15th April, 2013 rendered by the Tribunal in the case of M/s Tata Motors Ltd vs. State of Maharashtra, Second Appeal Nos.591 and 592 of 2005 decided on 15th April, 2013. The Tribunal relied upon the judgment of the Hon'ble Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd vs. Sales Tax Officer, Kanpur and Another [Vol.16 Sales Tax Cases page 563]. Thus, the Tribunal on one occasion grants this benefit while only in the case of present dealer the same has been denied. This inconsistency and contradiction in the conclusions of the Tribunal would, therefore, squarely raise a question and which is of law. Further, the orders passed in the case of Tata Motors Ltd by the Tribunal and granting similar relief are not questioned by the Revenue. The revenue has not brought any application seeking reference of any question of law for opinion and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimant dealer ) the Commissioner shall, in respect of purchases made by the claimant dealer on or after the notified day, of any goods specified [in entry 6 of Schedule B and in Schedule C] and used by him within the State:- (i) in the manufacture of [goods] [not being kerosene for sale, which manufactured goods have in fact been sold by him, or, exported by him, or (ii) in the packing of goods so manufactured, grant him subject to the reduction specified in sub-rule (3), a drawback, set-off, or as the case may be, a refund of aggregate of the sums determined in accordance with the provisions of rule 44D.:- Provided that where the turnover of sale of such manufactured goods consists principally of sales of waste or scrap goods, then the claimant dealer shall not be entitled to any drawback, set-off or as the case may be a refund under this rule. Provided further that where such manufacture results in production of goods other than taxable goods, then such draw back, set-off, or as the case may be, the refund, shall not be granted on purchase of goods including Capital Assets effected prior to the 1st April 1998 and also in respect of capital assets on which deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by a Registered dealer who manufactures goods for sale or export, the claimant/dealer can claim set-off and the Commissioner shall allow in respect of purchases made by such claimant dealer on or after the notified day, of any goods specified in entry 6 of Schedule 'B' and in Schedule 'C' and used by him within the State. The rule does not stop here. It goes on further to say that the set-off is admissible if the purchased goods are used by the claimant dealer within the State in the manufacture of goods [not being kerosene] for sale, which manufactured goods are in fact been sold by him or exported or in the packing of the goods so manufactured. The set-off is subject to reduction specified in sub-Rule (3). There are several provisos. They throw light on the object as well. Where the turnover of sale of such manufactured goods consists principally of sale of waste or scrap goods, then, the claimant dealer is disentitled from drawback, or set-off or as the case may be a refund under the rule. Then, by further proviso the dealer is disallowed this relief where such manufacture results in production of goods other than taxable goods. Thirdly, the claimant/dealer can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the foundation of the manufacturing plant and the manufacturing plant may have been used in the manufacture of goods sold, still, the cement brought in was not used for such purpose. The cement was not used during the course of the manufacture of goods but substantial portion of this cement was used for construction of staff quarters etc. That had nothing to do with the manufacturing activity. The cement brought in having no direct connection with the manufacturing activity that the Tribunal and the First Appellate Authority concluded that no set-off is admissible in terms of the rule and as it stands. 13. That set-off was rightly disallowed. 14. The Tribunal also endorsed this finding in paragraph 7 of the order passed in the Second Appeal. 15. During the course of the Reference Application, the Tribunal expressly termed this conclusion as involving a mixed question of fact and law. It is inexplicable, therefore, why a reference has been made and with such findings. If it was not purely a question of law but a mixed question of fact and law, then on facts the view cannot be termed as perverse. If we now accept the argument of Mr Thakar and allow the assessee/dealer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying the doctrine of equality. That cannot be done. 17. The Hon'ble Supreme Court in the case of Ekta Shakti Foundation v. Govt. of NCT of Delhi reported in (2006) 10 SCC 337 held as under:- 13. In Coromandel Fertilizers Ltd v. Union of India 1984 Supp SCC 457 it was held in paragraph 13 that wrong decision in favour of any party does not entitle any other party to claim the benefit on the basis of the wrong decision. In that case, one of the items was excluded from the schedule, by wrong decision, from its purview. It was contended that authorities could not deny benefit to the appellant, since he stood on the same footing with excluded company. Article 14, therefore, was pressed into service. This Court had held that even if the grievance of the appellant was well founded, it did not entitle the appellant to claim the benefit of the notification. A wrong decision in favour of any particular party does not entitle another party to claim the benefit on the basis of the wrong decision. Therefore, the claim for exemption on the anvil of Article 14 was rejected. 14. If the order in favour of the other person is found to be contrary to law or not warranted in the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not form a legal premise to ensure it to the respondent or to repeat or perpetuate such illegal order, nor could it be legalized. In other words, judicial process cannot be abused to perpetuate the illegalities. Thus considered, we hold that the High Court was clearly in error in directing the appellants to allot the land to the respondents. 31. In state of Haryana v. Ram Kumar Mann this Court observed: (SCC p. 322, para 3).:- The doctrine of discrimination is founded upon existence of an enforceable right. He was discriminated and denied equality as some similarly situated persons had been given the same relief. Article 14 would apply only when invidious discrimination is meted out to equals and similarly circumstanced without any rational basis or relationship in that behalf. The respondent has no right, whatsoever and cannot be given the relief wrongly given to them, i.e., benefit of withdrawal of resignation. The High Court was wholly wrong in reaching the conclusion that there was invidious discrimination. If we cannot allow a wrong to perpetrate, an employee, after committing misappropriation of money, is dismissed from service and subsequently that order is withdra ..... 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