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2015 (1) TMI 178 - HC - VAT and Sales TaxEntitlement to set off under Rule 41D of the Bombay Sales Tax Rules, 1959 - Export sales of the fountain pens sold at ₹ 30/- per piece and ball pens sold at ₹ 25/- per piece during the period 01-04-1995 to 30-09-1995 covered by Notification Entry 304 and export sale of fountain pens and ball pens sold at a price upto ₹ 30/- per piece during the period 01-10-1995 to 31.03.1997 covered by Notification Entry A-23 – Held that:- The Applicant contended that they have not claimed any exemption from the sales tax u/s 41 and, therefore, the standard condition No.3 in Annexure-1 referred to in column (4) of Entry A-23 was not applicable to them as far as the export of goods are concerned - Goods are either taxable or tax free - Taxable goods are either chargeable with tax or exempt from tax - The product sold by the assessee are in the exempted goods category - Section 2(33) determines whether goods are taxable or tax free and not Section 41 - The Applicant has sold pens locally in the course of inter State trade and also in the course of exports - The basic conditions were, set off under Rule 41D require the dealer to be a registered dealer having purchased goods covered by Schedule C, using the goods to manufacture taxable goods contemplated in Section 2(33) of the Bombay Sales Tax Act for sale or export - The goods manufactured should in fact have been sold or exported and goods purchased should have been used in the manufactured goods - since taxable goods include goods exempt from tax and the assessee has not claimed exemption from sales tax u/s 41, there is no reason to apply standard condition No.3 of Annexure-1 to notified entry A 23 – the Applicant’s rightly contended that they did not have claimed exemption from Sales Tax u/s 41, the condition No.3 cannot be imposed upon them – thus, the disallowance of set off is unsustainable – thus, the Tribunal was not justified in holding that the Applicant was not entitled to set off in respect of the export sales of the goods for the relevant period – Decided in favour of Applicant-Assessee.
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