COMMISSIONER OF SALES TAX Vs. BHARAT IRON

JUDGEMENT

(1.) THE Gujarat Sales Tax Tribunal has in this reference referred the following question to this court for opinion : " Whether on the facts and in the circumstances of the case, unserviceable machinery and spare parts of such machinery purchased by the opponent fall under entry 22 of Schedule E or entry 3 of Schedule B to the Bombay Sales Tax Act, 1959 ?"

(2.) FOLLOWING are the brief facts, which gave rise to this reference, which is preferred by the Commissioner of Sales Tax. The opponent M/s. Bharat Iron and Brass Foundries, Ahmedabad, is a firm which purchases materials such as unserviceable machinery, its spare parts, iron and steel scraps, pig iron, etc. , for being melted and also for manufacturing castings after melting them. The opponent-assessee was assessed for the period from 1st April, 1963, to 31st March, 1964, for the purpose of levying sales tax. During the course of the said assessment, the assessee claimed set-off contemplated by rule 41 of the Bombay Sales Tax Rules (hereinafter referred to as the "rules") on the ground that it has paid taxes on the purchase of unserviceable machinery and spare parts, which are used in melting and preparing castings. According to the assessee, the tax which it has paid on these purchases is at the rate of 3 per cent. under the Bombay Sales Tax Act, 1959 (hereinafter referred to as the "act"), and general sales tax at the rate of 3 per cent. The Sales Tax Officer concerned rejected this claim of the assessee for the set-off with the result that the assessee preferred an appeal before the Assistant Commissioner of Sales Tax. It, however, failed even before the Assistant Commissioner of Sales Tax. It, therefore, preferred a second appeal before the Tribunal.

(3.) IT is apparent from the above clause of rule 41 that the set-off in question would be available to the assessee only if his case falls within any of the entries of different schedules specifically mentioned in the clause.