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TMI Blog2023 (10) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... in manufacturing of oil, oil-cake and residue in terms of the provisions of Section 15A of the Haryana General Sales Tax Act, 1973 read with rule 24A of the Haryana General Sales Tax Rules, 1975 and (2) if answer to the above question is in affirmative, whether the dealer is entitled to refund of tax paid in excess at first stage, over and above tax payable on finished goods at the stage of sale at his hands, have been answered in favour of the assessee. General Sales Tax Reference is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the full amount of tax paid or the excess amount of tax paid over the tax leviable on sale, as the case may be, shall be refundable if the manufactured goods are sold in the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India: Provided that in case the manufactured goods have been sold before the 1 day of January, 1988, the tax paid on goods, leviable to tax at the first stage of sale under section 18, used in their manufacture, shall not be refunded." [Following Explanation added by Act 7 of 1996, with effect from 27-5-71] "Explanation-For the purpose of this section goods used in manufacture shall be goods used by a dealer as raw materials, processing materials, tools, stores, spare parts, accessories, fuel or lubricants, in the manufacture or processing of goods for sale and shall include containers and packing materials used for packing of the goods manufactured or processed. [Rule 24A inserted by 1" Amendment, Rules, 1988 dated 24/3/88] "Rule 24A. Deduction or refund of tax paid on goods at the first stage of sale in certain cases. (Section 15A, 27, 43 and 64). (1) A register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/- and the remaining cotton seed was purchased from outside the State. Broadly on these facts, the Assessing Authority allowed refund of Rs. 1,25,266/- to the assessee by order dated 24.10.1996 (Annexure P-1) under section 15A(ii) of the Act / rule 24A of the Rules on account of tax paid on purchase of cotton seed on payment of tax in the State. However, it appeared to the Revising Authority on examination of the assessment order that the Assessing Authority did not apply the provisions of section 15A(i)/rule 24A correctly to the case as he did not reduce the amount of tax paid on purchase of cotton seed in the State in proportion to its use in the manufacture of tax-free oil-cake being part of Schedule B to the Act for allowing adjustment of the said tax against the tax payable on sale of the goods manufactured. According to the Revising Authority, adjustment of tax paid on purchase of cotton seed could be allowed legally only in proportion of production of taxable goods-cotton-seed oil and oil-cake manufactured from crushing of cotton seed. Thus, computing, he raised a demand of Rs. 75,349/- against the assessee, vide his order dated 9.8.2000 (Annexure P-II). The order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bharat Petroleum case, the kerosene was also taxable for nine months in the year and in the case of Phulgaon Cotton Mills, yarn was also manufactured and it was subject to tax. Sri Dholakia contends for an implicit principle of apportionment the basis of turnovers of various items of goods manufactured and restriction of the quantum of set-off to a proportion based on the turnover of taxable goods to the total turnover. He cited certain decisions under the Income-tax and Sales Tax Acts in support of this contention: Anglo-French Textile Company Ltd. v. Commissioner of Income-tax [1954] 25 ITR 27 (SC), Tata Iron & Steel Co. Ltd. v. State of Bihar AIR 1963 SC 577; [1963] 48 ITR 123 (SC) and Commissioner of Income-tax v. Best & Co. (Private) Ltd. [1966] 60 ITR 11 (SC). We do not think these cases are of assistance. The first two cases dealt with the question as to when profits and gains can be said to accrue or arise in a manufacturing business and the third held that when a receipt is a composite one of capital and revenue nature, it is open to the Revenue to apportion the same and bring the latter to tax. These are situations in which the taxable element is severable. Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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