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2010 (1) TMI 1118 - ALLAHABAD HIGH COURTWhether the imposition of tax on the byproduct is bad? Held that:- The imposition of purchase tax on the assessee for the manufacture of khal is bad because the imposition of tax can only be made on the manufacturer under section 12(2) of the Act, which is liable to pay tax.Since the assessee was exempted from paying tax on the main product, i.e., ghani oil, which is not denied by the Tribunal or by any other authority, it stands to reason that byproduct would also stand exempted for reasons that byproduct only emerges when the main product is made. It cannot by itself become an item of manufacture. The Tribunal has not shown any reason for coming to the conclusion that the assessee was manufacturing oil by way of expeller in the assessment year 2003-04. For use of diesel, which is also totally without any evidence to show that the diesel was used or produced for the purpose of manufacturing. Decided in favour of the assessee
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