TMI Blog1962 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ol. Skins were then converted into leather by tanning process and the latter was sold to purchasers outside India, and we are here concerned with the turnover of sale of leather. The relevant period is the period commencing from 1st April, 1954, to 31st March, 1955. It is not in dispute that at the time the applicant-firm purchased raw hides from the slaughter house, it was required to pay purchase tax on the price paid by it for purchasing raw skin of slaughtered sheep. In its assessment for the period commencing from 1st April, 1954, to 31st March, 1955, the applicant-firm claimed set-off to the extent of the purchase tax paid by it on the raw skin as against its tax liability under proviso to section 10 or in the alternative under rule 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at all. On an application made by the applicant-firm under section 34 of the Act, the Tribunal has referred to us the following two questions: "(1) Whether on the facts and in the circumstances of this case the Tribunal was justified in holding that the provisions of sub-rule (1) of rule 11 of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954, had no application; and (2) Whether the procedure for ascertaining the set-off under the said sub-rule is faulty by virtue of the fact that it involves the levy of a tax on sales effected outside the State of Bombay?" Mr. Palkhiwalla on behalf of the respondent stated that for the purposes of this case, we should assume contrary to what has been held by the Tribunal that rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m a person who is not a registered dealer, he has to pay purchase tax at the specified rate. Now, the combined effect of section 10 and the aforesaid provisions of rule 11 would be that when a dealer purchases certain goods from a trader who is not a registered dealer under the Act, then he has to pay purchase tax over it. Further, when such a dealer, after paying purchase tax, manufactures articles out of these goods, or processes these goods and then sells the converted goods thereafter to the purchasers outside the State of Bombay, then he is entitled to say that he should get a set-off against his tax liability to the extent of the excess amount, if any, of the amount of the purchase tax paid by him over the amount calculated under clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the outside purchasers of leather is equal in amount of purchase tax paid by him. It is the contention of the applicant-firm that by virtue of section 46 of the Act, no sales tax was payable by it, the sale being to a purchaser outside the State of Bombay. By clause (II) of sub-rule (1) of rule 11, the rule-making authority had virtually levied a tax of three pies in a rupee on the sale price of the goods on which no sales tax was payable. The rule thus being beyond the provisions of section 46, was bad in law, in other words, beyond the rule-making capacity of the rule-making authority. The applicant therefore should get the refund or adjustment of the entire purchase tax paid by him against his tax liability. We are unable to accept th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
