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2015 (7) TMI 463 - HC - VAT and Sales TaxSet off claimed under Rule 41-D of the Bombay Sales Tax Rules, 1959 - The dealer is carrying on business of export of goods - tax paid on the consumables which were treated as components, parts and accessories of machinery - Whether the Tribunal was justified in confirming the reduction of set off by the Deputy Commissioner of Sales Tax by 1.5% by calculating the exports at 96.1% in place of 97.6% calculated by the Sales Tax Officer after excluding the sales of scrap? Held that:- We are concerned in the present case with the proviso below clause (2) of sub-rule (1) of Rule 41-D where the Legislature has clarified 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. It is not the conclusion drawn by both authorities in the present case that the turnover of sales of the manufactured goods and intended for export and in fact exported consisted principally of sale of waste or scrap goods. The words “consists principally of sales of waste or scrap goods” are completely ignored by both the Revisional Authority and the Tribunal. The dealer in this case has not been found to have principally dealt with waste or scrap goods. The exported goods were manufactured with the purchases of goods styled as raw materials that have been made by the dealer. In such circumstances, we do not see how the dealer was ineligible or not qualified for the refund under the Rule. A finding of fact, therefore, should have been rendered and in terms of this proviso. Equally, on the second aspect, the disentitlement comes in the case of a dealer in respect of purchase of goods which are used by him in the manufacture of goods treated as capital assets by him or parts and components of such capital assets. The Sales Tax Officer found that the dealer has not treated them as purchases of capital goods. - there is no discussion at all in both the orders as to why goods or assets were indeed not treated as capital assets by the dealer. The authorities ought to have indicated with clarity and precision as to what is meant by capital goods and which capital goods and of what description have been acquired. We are of the opinion that the authorities have completely misread and misinterpreted the Rules and the concurrent conclusion is not in accordance with law. - Decided in favor of assessee.
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