INGERSOLL RAND INDIA LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) AT the instance of the assessee, the Gujarat Sales Tax Tribunal has referred to us under section 69 of the Gujarat Sales Tax Act, 1969, the following question for our opinion : " Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that the phrase 'the amount of sales tax or of general sales tax or, as the case may be, of both recovered separately under the Act,' appearing in rule 42 (B) (i) (a) of the Gujarat Sales Tax Rules, 1970, can only be interpreted to mean the amount of such tax legally recovered or recoverable under the Act and not the amount actually recovered by way of tax ?"

(2.) THE assessee is a dealer registered under the Act. It manufactures various types of air-compressors, rock-drills and parts thereof. On those products, it used to pay purchase tax at the rate of 8 per cent under the residuary entry 13 of Schedule III to the Act. The selling dealers were also assessed on that basis in respect of the sales made to the assessee. The assessee had filed its returns for the years 1973 to 1977, but they were not taken up for consideration for the purpose of assessing the correct amount of tax payable by the assessee till February 22, 1977, in view of the extensions granted under section 42 (1) (b) of the Act. In all its returns, the assessee had claimed set-off under rule 42 of the Gujarat Sales Tax Rules at the rate of 8 per cent as it had paid tar, on the purchases made by it at the rate of 8 per cent Meanwhile, the application made by the assessee under section 62 of the Act in respect of the sales of aircompressors and other articles sold by it came to be decided on February 22, 1977, and it was decided therein that the said goods were covered by entry 16 (1) of Schedule II, Part A to the Act and thus they were exigible to tax at the rate of 3 per cent up to July 31, 1975 and 4 per cent thereafter. In view of this determination order, the Sales Tax Officer, while passing assessment orders, allowed set-off only at the rate of 3 per cent for the purchases made up to July 31, 1975, and at the rate of 4 per cent for the subsequent purchases on the ground that the tax on those purchases were really payable at those rates and, therefore, set-off cannot be granted at the rate of 8 per cent, even though the assessee had paid the tax at that rate.

(3.) THE assessee then filed five second appeals in the Tribunal. The Tribunal also dismissed the same agreeing with the view taken by the Sales Tax Officer and the Assistant Commissioner.