D.K.Seth, J. - (1.) Leave is granted to Mr. A. K. Dey to file vakalatnama within two weeks.
(2.) The Income-tax Officer and the appellate authority disallowed the claim for deduction of a sum of Rs. 4,05,744 under Section 43B of the Income-tax Act, 1961. The learned Tribunal overruled the same and allowed the deduction. The Commissioner of Income-tax, West Bengal-II, Calcutta, sought this reference under Section 256(1) of the Act The question formulated is : "Whether, on the facts and in the circumstances of the case and having regard to Rule 41D and Rule 45(3) of the Bombay Sales Tax Rules, the Tribunal was right in law in deleting the disallowance of Rs. 4,05,744 under Section 43B of the Act."
(3.) In order to appreciate the question, it is necessary to refer to Rule 41D and Rule 45(3) of the Bombay Sales Tax Rules. Rule 41D provides for grant of draw back, set off or refund of the aggregate of the sums determined in accordance with the provisions of Rule 44D in respect of purchases made by a claimant dealer on or after the notified date of any goods specified, in Part II of Schedule C and used by him within the State in the manufacture of taxable goods for sale, which manufactured goods have, in fact, being sold by him or exported by him or in the packaging of the goods so manufactured. Under Rule 45, such draw back or set off or refund is available only to a registered dealer under the Bombay Sales Tax Act or under any earlier law at the time of such purchase. Under Sub-rule (3), a dealer entitled to a sum by way of draw back, set off or refund or reimbursement, subject to Rule 46(1), may adjust such sum against the tax payable according to the returns relating to such period. Such adjustment is permissible if the adjustable amount exceeds the tax payable with the tax payable according to the return for any subsequent period. Rule 46(1) puts some restrictions on adjustment. If any notice under Section 38(4) of the Bombay Sales Tax Act is issued to a dealer for recovery of any amount pursuant to such notice, the same is to be recovered first before the adjustment is allowed.;