Law: Sales Tax Act, (III of 1951)

Section: 4

(a) Sales Tax Act (III of 1951)---- S. 4-Partly manufactured goods--Evidence that petitioner purchased raw material from licensed manufacturer, importers or wholesaler---­Neither produced before Tribunal nor alleged before it-Section 4, held, inapplicable in circumstances of case. (b) Sales Tax Act (III of 1951)- -- S. 27-Sales tax, payment of-Whether tax paid on a previous sale or not-A question of evidence-Held, no legal presumption can be raised in this regard. (c) Sales Tax Act (III of 1951)- --S. 27-Refund of tax paid-Contention that if seller of partly manufactured goods cases not to pay tax or departmental authorities remiss in enforcing such duty manufacturer of finished goods not to be asked to bear burden of tax or be denied benefits of provisions of S. 27(1)--Contention, held, cannot be accepted in view of clear language of subsection (1) making grant of refund subject to condition of tax having been paid as a matter of fact on previous sale. Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) 1 K B 54 ref. JUDGMENT SAAD SAOOD JAN, J.-These are two applications under section 17 of the Sales Tax Act, 1951. Although they relate to two different assessment years the facts and the questions of law raised therein are identical. For this reasons they are being taken together. 2. The petitioner in the two petitions is a private limited company and is engaged in the business of manufacturing cotton-yarn. As its total turn-over in the assessment years in question was above the minimum taxable limit, it was assessed to sales tax. During the assessment proceedings it claimed adjustment in sales tax in respect of the raw material purchased by it from the local market. However, in support of its claim for adjustment it did not produce any evidence to show that the persons from whom it had purchased the raw material had paid any sales tax thereon. In the absence of such a proof the Sales-tax Officer disallowed the claim. It challenged the decision of the Sales Tax Officer before the Appellate Tribunal but without any success. It has now come to this Court. 3. The questions of law formulated by the petitioner for the considera­tion of this Court are: (i)…

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