TMI Blog2015 (1) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... on 5 of the CST - He can therefore produce a certificate in the Form along with evidence of export of such goods and claim exemption in respect of the liability to pay the Sales Tax - the sales and purchases which are not liable to tax under the BST by virtue of Section 75 have been rightly excluded or taken out of the purview of Rule 42-H and that is the only interpretation which can be placed on the said Rule - If one peruses Section 5 and particularly Sub Section (1) and SubSection (3) of the CST together with Section 75 of the BST, Rule 21A of the Bombay Sales Tax Rules, Form N-14B harmoniously and together, it would be apparent that what is not within the purview of the BST can never be brought in for the purposes of claiming a deduction or set-off under Rule 42H. In respect of the amount of tax payable by registered dealer on his sales or goods on which deduction under Section 8(1) has been not allowed is a case of the registered dealer to whom the BST was applicable - If it was applicable because the sale was not a sale which was beyond the purview or reach of the BST, it is to enable such a dealer to claim the drawback, set off etc. on goods purchased by him and liable f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That Appeal also failed. That is how the Second Appeal was filed before the Tribunal. 4. The Assessee argued before the Tribunal that the set off under Rule 42-H as claimed is to the tune of ₹ 1,89,749/- however, it was allowed and confirmed in the First Appeal at ₹ 1,35,052/-. Thus, disallowance of ₹ 54,697/- was made on two counts. We are not concerned with this Appeal with regard to the disallowance of tax paid on materials other than supari. We are only concerned with 11% set off disallowed, because the Assessee had effected sales against declaration in Form 'N14B'. That is referable to Rule 42H. Thus, the Assessee succeeded partially but could not obtain this relief. 5. Mr. Surte, the learned Counsel appearing for the Assessee reiterated the arguments as canvased before the Tribunal. He submitted that the Tribunal has failed to take note of the language of Rule 42H as appearing prior to 1st October, 1995 and after the same came to be reworded from 1st April, 1999. During the period 1st October, 1995 to 31st March, 1999, which is the period with which we are concerned, Mr. Surte argued that, the explanation II was deleted. It was not there in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue and against the Assessee. Mr. Sonpal submits that there is no question of a letter addressed to M/s. K. Mahendrakumar and Company on 17th September, 1999 being construed as a circular, as a circular only emanates from the Commissioner, which is addressed to all and not a reply to any letter by a particular Assessee, as is in this case, namely of M/s. K.Mahendrakumar and Company. Secondly, this was not forming part of the record of the Tribunal. The circular dated 15th November, 1999 relied upon by Mr. Surte deals with Rule 42I and not Rule 42H. Therefore, it is of no assistance in construing or interpreting Rule 42H. Mr. Sonpal submits that Rule 42H as worded and prior to 1st October, 1995 and from 1st April, 1999 so also between 1st October, 1995 and 31st March, 1999 needs to be looked into and considered minutely. He submits that prior to October, 1995 and subsequent to 1st April, 1999, the explanations are to be found below Rule 42H. There is some sort of parity inasmuch as, prior to 1st October, 1995 the Rule was dealing with registered dealer, who had a trademark or patent in the goods in which he transacted. In the present case, we are concerned with Rule 42-H appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off, or as the case may be, refund under this rule shall be in proportion to the purchase price of that instalment. (1A) Notwithstanding anything contained in subrule (1), the amount of drawback, setoff or as the case may be, refund shall be subject to the condition that if on any sale, (not being a sale against any declaration or certificate prescribed under the Act, rules or as the case may be, any entry of the Schedule to the notification issued under section 41) effected by the dealer, tax is payable at a rate which is lower than the rate applicable to the corresponding purchase of the same goods, then, the amount of drawback, setoff, or as the case may be, refund shall not exceed the amount of tax payable on the sales. (2)(a) The claimant dealer shall not issue a certificate in Form 31 of the sale is made by the claimant dealer against any declaration or certificate prescribed under the Act, rules or, as the case may be, any entry of the Schedule to the notification issued under section 41. (b) No drawback, setoff or refund shall be allowed under this rule in respect of purchases of any goods on the sale of which the claimant dealer has claimed reduction of sale price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the goods out of the territory of India within the meaning of SubSection (3) of Section 5 of the CST. He can therefore produce a certificate in the Form referred by us above along with evidence of export of such goods and claim exemption in respect of the liability to pay the Sales Tax. Pertinently, this form has to be filled in and signed by the exporter to whom the goods are sold. Section 5 of the CST contains SubSection (3). Section 5 has been inserted in the CST so as to determine as to when a sale or purchase of goods can be said to be taking place in the course of import or export. SubSection (3) was inserted therein with retrospective effect from 1st April, 1976, which reads as under: (3) Notwithstanding anything contained in subsection (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export. 14. A bare perusal thereof would indicate that the same has been inserted so as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-off under Rule 42H. If that is the intent of legislature and it has been given effect to by the Tribunal in the impugned order, then we do not find that its conclusion is vitiated. 16. The absence of the explanation therefore is an aspect which need not be considered by us, however, since a debate was raised by Mr.Surte, we must at once clarify that prior to 1st October, 1995 Rule 42H was dealing with a case of drawback, set-off of tax paid on goods purchased by a dealer holding a trademark or a patent. If a purchase was in respect of such sale, if the dealer registered under the BST holds a trade mark or a patent, then the drawback, setoff can be allowed and that is why Rule 42H as appearing prior to 1st October, 1995 contained the explanation. In assessing the amount of tax payable by a registered dealer paying tax for any period on its sale of taxable goods not being declared goods in respect of which he holds trademark or patent, then the Commissioner shall, in respect of his purchase of such goods or in respect of his purchase of the goods referred to in SubClause (ii) of Clause (a) of Sub-Rule 2, grant him that relief. The expression 'sale' had to be defined and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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