Law: Sales Tax Act, (III of 1951)

Section: 27(1),2(12),8,7,3,27,2(8)

Law: Central Excise and Salt Act, (I of 1944)

Section: 1stSchedule

Sales-tax Act, 1951 -- Sections 2(12), 27(1) -- Refund -- Raw material -- Partly manufactured goods -- Assessee manufacturer of soap -- Soap exempt from sales-tax -- Raw material used in the manufacture of soap -- Whether 'Partly manufactured goods' within the meaning of Section 2(12) of the Act -- Held no -- Whether assessee entitled to refund of sales-tax paid on raw material used in the manufacture of soap -- Held no -- Interpretation of statutes -- Enactment -- Budget Speech of the Finance Minister -- Circulars issued by Central Board of Revenue -- Relevancy for interpretation of the words of the enactment -- ORDER ABRAR HASSAIN NAQVI, Judicial Member-- These are four departmental appeals relating to the assessment years 1972-73 to 1975-76. In all the four years only one common question is involved and therefore the appeals are being disposed of together. The question involved is as to whether the assessee is entitled to refund of Sales Tax paid on the raw material used by the assessee notwithstanding the fact that the end product is exempt from the sales -tax. 2. The relevant facts of the case are that the assessee manufactures soap. The raw material used in the soap on which sales-tax had been paid were soda caustic, Talo oil and Coconut oil Sales-tax paid on these partly manufactured goods was as follows:-- 1972-73 Rs. 1,25,407/- 1973-74 Rs. 11,507/- 1974-75 Rs. 1,23,863/89 1975-76 Rs. 1,29,497/- The assessee claimed refund of these amounts under Section 27(1) of the Sales-tax Act which reads as follows: "27(I) Where partly manufactured goods are purchased by a manufacturer and tax has been paid on those goods on importation or on any previous sale, a refund of the amount of the tax so paid shall be made to the manufacturer. The STO disallowed the claim on the ground that the raw material on which the Sales-tax was paid, was not partly manufactured goods as defined under Section 2(12) of the Act inasmuch as the soap was exempt from payment of Sales-tax. The AAC on appeal allowed the refund relying upon the following cases-- 1. CST. Vs. H. Mohammad Hussain & Co. (1974) 29-Tax. 44 2. CST. Vs. Shafiq Corporation (1974) 29-Tax.103 3. CST. Vs. Combined…

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