TMI Blog1991 (3) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Gujarat Sales Tax Act, 1969. It held recognition certificate under section 32 of the said Act which enabled it to purchase raw and processing materials and consumable stores for use in the manufacture of paper as taxable goods for sale. Under section 13(1)(B) it is, inter alia, provided that there shall not be deducted from the turnover of sales, sales of goods to a recognised dealer unless the recognised dealer certifies under the prescribed form that the goods purchased by him are used by him as raw and processing materials, or as consumable stores in the manufacture of taxable goods for sale by him. The form which is prescribed under the Rules is form No. 19 which is in the nature of certificate issued by the recognised dealer purchasing the goods. The applicant being a recognised dealer purchased raw and processing materials and consumable stores between 6th May, 1970 to 31st March, 1971 and he issued certificate in form No. 19 and thereby he was not required to prepay the tax. The applicant had also purchased certain other quantity of said goods locally from registered dealers on payment of tax during the said period. The said raw and processing materials and consuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of any tax outside the State of Gujarat. Shortly, according to applicant, he has not committed breach of form No. 19 and therefore he was not liable to pay purchase tax under section 16. (iii) The Sales Tax Officer assessed the applicant by judgment and order dated 7th January, 1976. He found that the applicant has purchased raw and processing material and consumable stores like caustic soda and pulp both on payment of tax locally as well as without payment of tax on the strength of recognition certificate. He also found that out of total sales some sales were effected locally or in the course of inter-State trade and commerce which he described as qualified sales. However, some sales were effected on the basis of consignment outside the State of Gujarat which he described as unqualified sales. He worked out the ratio between the two as 72 per cent/28 per cent, i.e., 72 per cent as qualified sales and 28 per cent as unqualified sales. For these unqualified sales he levied the purchase tax. (iv) Being aggrieved by the said order of the Sales Tax Officer the applicant preferred appeal to the Assistant Commissioner, Sales Tax, under section 65 of the said Act in respect of 28 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration in form No. 19, the Tribunal confirmed the decisions of lower authorities. That part of the decision of the Tribunal is not under challenge before us. 3.. However, the applicant preferred application under section 69(1) of the Act to the Tribunal calling upon the Tribunal to refer the question of law for the decision of this Court contending that the lower authorities have, in fact, found that the applicant had used only 28 per cent of the goods purchased with payment of tax in the manufacture of finished goods which were sold on consignment basis outside the State of Gujarat, and therefore, by necessary inference the remaining goods representing about 72 per cent were the tax-paid goods which were used in the manufacture of finished goods which were either sold locally or in the course of inter-State trade and commerce. On these findings of fact of lower authorities it was urged before the Tribunal that the applicant was entitled to claim set-off of tax under rule 42 of the said Rules even though claim of set-off of tax was not specifically raised at any time before the lower authorities. He also urged that the requisite material to work out actual amount of set-off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualified sales and based thereon the liability for purchase tax on unqualified sales was fastened. Mr. Pathak, therefore, submits it was only when such liability was fastened that the right to claim set-off under rule 42 accrued to assessee for 78 per cent of the goods. He, therefore, submits that the claim for set-off under rule 42 could not have been raised prior thereto, and such claim could not have been enforced. 5.. We do not accept this submission of Mr. Pathak for the simple reason that the claim of set-off of tax could have been alternatively pleaded by the applicant before the Sales Tax Officer. It is required to be noted that the proceedings before the Sales Tax Officer were the proceedings of reassessment under section 44 of the Act. Therefore, in such proceedings, the applicant-assessee could have wholly disputed the liability to pay purchase tax or could have in the alternative contended that in case it was found that part of the goods were covered towards the qualified sales, he was entitled to set-off of tax against such qualified sales. Mr. Pathak, therefore, is not right in contending that the assessee could have made the claim of setoff of tax only after the me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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