TMI Blog1965 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Reference made to it by the Gujarat Sales Tax Tribunal. Two questions were referred by the said Tribunal to the High Court: "1. Whether in the facts and circumstances of the case, the purchase of the raw cotton by the applicant Mill could be said to have been intended for use in the production of cotton seeds for sale within the meaning of clause (ii) of rule 6 of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954; 2.. Whether the applicant Mill is entitled under rule 12(1) to a refund of the purchase tax paid by it." The facts set out in the statement of the case by the Tribunal are briefly as follows: The respondent is a manufacturer of cotton textiles, particularly of coarse and medium variety cloth. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for manufacture. The cotton seeds which form the bye-product of the ginning process would no doubt have to be sold because the mill has no use for them. But that does not mean that the purpose for which unginned cotton was purchased was the sale of cotton seeds. It is not reasonable to suppose that a textile mill purchases unginned cotton for the purpose of selling the cotton seeds." At the instance of the respondent, as already stated, the Tribunal referred the case to the High Court. The High Court answered question No. 2 in the affirmative, but did not answer question No. 1 on the ground that the answer to the question was not relevant for the purpose of determining the matter in controversy. Mr. Ganapathy Iyer, the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the Collector shall on application for refund made by the dealer in the manner specified in rule 25 of the Bombay Sales Tax (Procedure) Rules, 1954, refund to such dealer the amount of purchase tax paid by him in respect of such purchase; or where the amount of purchase tax payable under clause (a) of section 10 in respect of such purchase has not yet been paid, the Collector shall by order remit the amount so payable." Mr. Ganapathy Iyer contends that when rule 12 speaks of the purpose specified in clause (ii) of rule 6, it means the purpose of "producing any goods falling under the corresponding entry in column 2 of the said Schedule for sale". In other words, he says that the purpose must be of producing unginned cotton, ginned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no question of furnishing any certificate at that stage. As the High Court observed, "what is necessary is that goods should have been actually used for the purpose specified, viz., the production of any of the goods aforementioned for sale." These conditions have been satisfied in this case because unginned cotton was used for the purpose of producing one of the goods specified in column 2, namely, cotton seeds. Consequently, the respondent is entitled to a refund under rule 12 and the High Court was right in answering the second question in the affirmative. We also agree with the High Court that in view of its answer to question No. 2 it is not necessary to answer question No. 1. In the result the appeal fails and is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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