Law: Sales Tax Act, (III of 1951)

Section: 7,3

Law: Income Tax Act, 1922

Section: 16(3)

Sales-tax Act, 1951 -- Section 7 -- Exemption -- Vegetable ghee -- Sales-tax on vegetable ghee, including Defense Surcharge, Excise Duty and Rehabilitation tax merged into Excise Capacity Duty -- Whether can be equated to total abolition of sales-tax on vegetable ghee -- Held no -- Levy of sales-tax on biscuits -- Vegetable ghee consumed in the manufacture of biscuits -- Whether exempt from sales-tax -- Held yes -- Whether manufacturer entitled to refund of sales-tax paid on vegetable ghee in the garb of capacity duty -- Held yes -- "Merger", meaning of -- Statutes -- Interpretation of -- Intention of the Legislature and Legislative history as apparent from the Budget Speech -- Whether helpful guide -- Held yes -- Notification under section abolishing levy of sales tax on vegetable ghee with effect from 11-6-67 -- Manufacturer of biscuits consuming vegetable ghee in process of manufacture -- Claim for refund of sales tax in respect of vegetable ghee consumed -- Held: While levying sales tax on basis of biscuits, Sales Tax Officer was under an obligation to exclude value of vegetable ghee included therein -- Fiscal legislation -- Relevant extracts from budget speech of Finance Minister can serve helpful guides and can be relied upon to gather intention of Legislature -- Legislative history of imposition of a liability to taxation can also be legitimately examined -- ORDER The order was passed by M. T Siddiqui, President.-- These three appeals by a private limited company, manufacturing biscuits, mainly object to the Sales-tax Officer's refusal to allow the refund of sales-tax on vegetable ghee consumed in the manufacture of biscuits. Objections were also taken to the reduction of refund claim by 15% for want of proof of payment of sales-tax and also inclusion of the middlemen's profit at 10% from some of the other taxable purchases. 2. So far as the last two objections are concerned these need not detain us long as the refund on items other than vegetables ghee was reduced by 15% by the Sales-tax Officer as the appellant could not produce necessary evidence to establish that sales-tax was paid on all the items. This position continues to exist even before us…

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