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TMI Blog2023 (10) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... ax paid on purchase of cotton seed at first stage and used in manufacturing of oil, oil-cake and residue in terms of the provisions of Section 15A of the Haryana General Sales Tax Act, 1973 read with rule 24A of the Haryana General Sales Tax Rules, 1975. 2. If answer to the above question is in affirmative, whether the dealer is entitled to refund of tax paid in excess at first stage, over and above tax payable on finished goods at the stage of sale at his hands? 2. The brief facts of the case are that the petitioner dealer (hereinafter referred to as 'the assessee') was engaged inter alia in the business of crushing cotton seed yielding cotton-seed oil, oil-cake and residue. The case related to 1995-96. Cotton seed was declared goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds except those specified in Schedule B, subject to the conditions and exceptions specified therein, or when the tax leviable on the sale of manufactured goods is less than the tax paid in the State on the sale or purchase of goods, other than the tax paid on the last purchase of paddy, cotton and oil seeds, used in their manufacture, the full amount of tax paid or the excess amount of tax paid over the tax leviable on sale, as the case may be, shall be refundable if the manufactured goods are sold in the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India: Provided that in case the manufactured goods have been sold before the 1 day of January, 1988, the tax paid on goods, levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax at a lower rate, the full amount of tax paid at the first stage if the sale is exempt from tax, or the difference between the amount of tax at the first stage and the tax calculated on sales to Government or to such organisation; shall be refundable to the dealer on appending with the return, in form S.T. 9 and, wherever applicable, in form I under the Central Sales Tax Act, 1956, an application in form S.T. 33 on furnishing a certificate in form S.T. 14 in proof of payment of tax by the selling registered dealer at the first stage: Provided that no deduction of refund shall be admissible in respect of the same goods under this rule where deduction [under the Act or any other Rule] from turnover of refund of tax under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cotton seed in the State in proportion to its use in the manufacture of tax-free oil-cake being part of Schedule B to the Act for allowing adjustment of the said tax against the tax payable on sale of the goods manufactured. According to the Revising Authority, adjustment of tax paid on purchase of cotton seed could be allowed legally only in proportion of production of taxable goods-cotton-seed oil and oil-cake manufactured from crushing of cotton seed. Thus, computing, he raised a demand of Rs. 75,349/- against the assessee, vide his order dated 9.8.2000 (Annexure P-II). The order passed by the Revising Authority was upheld by the Member, Sales Tax Tribunal, Haryana on appeal, vide his order dated 12.10.2000 (Annexure P-III) 4. Learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming exemption, it is not necessary for the assessee to prove that the entire raw material had been used only for manufacture of taxable goods. The relevant observations made by the Supreme Court in this respect are reproduced below: "Turning now to the main question, we are inclined to agree with respondents' counsel that they are entitled to a set-off of the entire tax paid by them on the purchases of sulphuric acid and cotton, respectively. The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale. Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial though we may point out that in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is taxable and is sold and partly for manufacture of cloth which is not taxable. In these instances, it is clear that only some of the cotton is utilised for the first purpose and some for the second purpose and so only the purchase tax paid in respect of the quantity utilised for the first purpose will be eligible for set-off. But the type of user with which we are concerned is a composite one in which it is not possible to correlate any part of the purchased goods as having gone in for the purpose of manufacture of taxable goods. The position is picturesquely brought out in the case of Bharat Petroleum. The entire sulphuric acid purchased has no doubt been used in the manufacture of kerosene though perhaps not a drop of acid clings to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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