ALEMBIC GLASS INDUSTRIES LTD Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THE main question which is involved in this reference is whether proviso (a), which is attached to rule 11 (1a) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 (hereinafter referred to as "the Rules"), is ultra vires the provisions contained in section 18b (2) of the Bombay Sales Tax Act, 1953 (hereinafter referred to as the "act"), THE question arises in this way :

(2.) THE applicant M/s. Alembic Glass Industries Ltd. is a dealer registered under the Act, and carries on the business of manufacturing various articles of glass. It has been assessed to sales tax for the period from 1st April, 1957, to 31st March, 1958. During the course of the assessment proceedings, the said assessee claimed a set-off for the amount of Rs. 7,367 under sub-rule (1a) of rule 11 of the Rules. THE amount claimed as set-off is the tax paid by the assessee on goods such as machinery, tools, electric motors, drills, switches, fusements, iron plates, angles, springs, etc. , used during the process of manufacturing of goods on which the assessee has rendered itself liable to pay a tax under section 8 of the Act. THE taxing authorities rejected this claim of set-off put forward by the assessee holding that these goods did not amount to "raw materials or processing materials" used in the manufacturing of goods, and since proviso (a) attached to sub-rule (1a) of rule 11 of the Rules contemplates a set-off only if the goods are used as "raw materials or processing materials, etc. ", the assessee is not entitled to the set-off in question.

(3.) BEFORE attempting to answer these questions, it would be proper to make a reference to the relevant provisions of the Act and the Rules and also to point out the changes brought about by Bombay Act 16 of 1957 as from 1st July, 1957. It may not be out of place to mention here that the assessee's claim for set-off is with regard only to the tax paid on purchases made by it from 1st July, 1957, onwards. It may also be noted that the Act, i. e. , the Bombay Sales Tax Act, 1953, has undergone some amendments by Bombay Act 16 of 1957 and these amendments are found to have been made in view of the fact that section G of the Central Sales Tax Act, 1956, which is a charging section creating liability to tax on inter-State sales, was brought into force from 1st July, 1957.