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2016 (9) TMI 610 - HC - VAT and Sales TaxSet-off on purchase of spares of electrical motors - manufacture of pumping sets - prohibited goods - Section 2(21) of the Act - the raw material used for manufacturing of electric motors were not directly sold by the assessee but, were sold after manufacturing pump sets - Whether the Gujarat Value Added Tax Tribunal was justified in holding that the dealer was entitled to set off under rule 42 of the Gujarat Sales Tax Rules, 1970 on purchase of prohibited goods as defined in clause 21(2) of the Gujarat Sales Tax Act, 1969 namely, spare parts and accessories of electric motors used in the manufacture of water pumps? - Held that: - The 4th condition has a direct relation to the main body of the rule which provides that in assessing the tax payable by a manufacturer, the Commissioner shall subject to conditions grant him drawback, set off or refund of the whole or any part of the tax in respect of purchase of goods used by him in manufacture. The moment therefore the raw material is used for manufacture by an assessee and subject to other conditions being fulfilled, has been sold in the State of Gujarat or in the course of inter-State trade etc., Rule 42 would enable him to claim drawback, set off or refund as the case may be at prescribed rate on the tax paid on such purchases - appeal dismissed - decided against appellant.
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