MANIAR AND SONS Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessees, who are a partnership firm and were registered as a dealer under the said Act and also held a licence under section 23 of the said Act, in respect of the assessment period 3rd November, 1965, to 31st March, 1966.

(2.) The facts material for the purposes of deciding this reference are that during the said assessment period the applicants purchased plastic bangles of the value of Rs. 2,89,990 from Aurobrite (India) Private Limited. In respect of the bangles so purchased by them Aurobrite (India) Private Limited issued to the applicants invoices in which at the end there appear the words : "G.S. Tax - | included." Sales Tax -

(3.) The amount of such tax included in the invoices was not separately shown. During the assessment period the applicants resold the bangles so purchased by them for a total price of Rs. 3,92,208. Out of these sales, sales of the value of Rs. 50,000 were effected to the registered dealers who held recognition granted by the Commissioner of Sales Tax and against declarations in form 15 to the Bombay Sales Tax Rules, 1959, given by such purchasers. In respect of the remaining sales of the aggregate value of Rs. 3,42,208, the applicants claimed a deduction as resales under section 10(2)(i) of the said Act. This claim of the applicants was rejected. According to the applicants, they had paid a sum of Rs. 8,693.88 by way of sales tax and Rs. 7,568.52 by way of general sales tax to Aurobrite (India) Private Limited. In support of this claim, the applicants filed with the Sales Tax Officer, in the course of assessment proceedings, statements issued by the said Aurobrite (India) Private Limited showing the amount of sales tax and general sales tax recovered by the said company as also a letter from it stating that it had remitted the amounts so recovered by it to the Government authorities. The applicants also produced another letter from the said Aurobrite (India) Private Limited giving the date and the number of the receipted challan by which the said amounts were thus paid over by the said Aurobrite (India) Private Limited into the treasury. In the course of their assessment proceedings, the applicants claimed a set-off under rule 42 of the Bombay Sales Tax Rules, 1959, in respect of the said sum of Rs. 7,568.52, being the amount of general sales tax, which their vendors, the said Aurobrite (India) Private Limited, had recovered or collected from them. The Sales Tax Officer negatived both the claim for deduction and the claim for set-off. Against this order the applicants filed a first appeal to the Assistant Commissioner of Sales Tax. The said appeal was dismissed. Against the dismissal of their appeal the applicants filed a second appeal to the Tribunal, which too was dismissed. Thereafter, at the instance of the applicants the Tribunal has stated a case and referred the following two questions for our determination :