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Income-tax Reference No.511 of 1972, decided on 27th September, 1983.
---S. 27--Refund--Conditions to be fulfilled for claiming refund under S.27.
An assessee claiming refund under section 27 of Sales Tax Act, 1951 has to satisfy that (1) he is a licensed manufacturer (2) partly manufactured goods were purchased by him and (3) Sales Tax has been paid on these goods on importation or on any previous sale. After satisfying these conditions, he becomes entitled to the refund.
The assessee has claimed refund on the raw-material used by the seller in packing material supplied to the assessee and the labels affixed on the battery cells. The question was whether the labels used by the assessee for purpose of affixing on the battery cells and the carton used as packing material for the sale of the assessee products were partly manufactured goods and as such were component parts of article manufactured and sold by the assessee The finding of the Tribunal was that these were component parts and were necessary for the sale of the goods manufactured by the assessee. This finding of the Tribunal was a finding of fact and had not been challenged by the Department on the ground that no evidence was available to arrive at this finding. In view of this finding, which had remained unchallenged, the assessee was entitled to refund as it has satisfied all the conditions necessary for claiming such a refund.
Shaikh Haider for Applicant.
Iqbal Naeem Pasha for Respondent.
Date of hearing: 27th September, 1983.
.--The Department has filed this application under Section 17 (1) of the Sales Tax Act, 1951 raising the following question:-
"Whether on facts and in the circumstances of the case, the learned Appellate Tribunal was justified in allowing the sales-tax refund to the assessee."
The respondent is a private limited company dealing in manufacturing of dry cells and pharmaceutical goods. For the Assessment year 1965-66 the respondent claimed sales tax refund amounting to Rs.23,060 on raw-material used by the seller in packing material supplied to the respondent but the Sales-tax Officer rejected the claim. The respondent filed an appeal before the Appellate Commissioner of Sales-tax, which was allowed. The Department then filed an appeal before the learned Income-tax Appellate Tribunal who rejected it. The learned Tribunal observed that the labels used by the assessee for affixing on the battery cells are component part of this article. It was further observed that the cartons used as the packing material for the sale of assessee's product were essential for the purpose of the sale of the articles manufactured by the assessee, and could be treated as the component part of the article. The refund was claimed under Section 27 of the Sales Tax Act which reads as follows:--
27(1) Where partly manufactured goods are purchased by a licensed manufacturer and tax has been paid on these goods on importation or any previous sale, a refund of the amount of the tax so paid shall be made to the licensed manufacturer."
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The word "licensed' appearing twice in this sub-section was omited by the Finance Ordinance, 1972.
The words "partly manufactured goods" has been defined by Section 2(12) as follows:-
"partly manufactured goods means only goods which are to be incorporated into and form a constituent or component part of an article which is subjected to tax." ,
An assessee claiming refund under Section 27 has to satisfy that (1) he is licensed manufacturer, (2) partly manufactured goods were purchased by him and (3) Sales-tax has been paid on these goods on importation or on any previous sale. After satisfying these conditions he becomes entitled to the refund.
The assessee has claimed refund on the raw-material used by the seller in packing material supplied to the assessee and the labels affixed on the battery cells. The question is whether the labels used by the assessee for purpose of affixing on the battery cells, and the carton used as packing material for the 'sale of the assessee products were partly manufactured goods 'and as such the component part of article manufactured and sold by the assessee The finding of the learned Tribunal is that these are component parts are necessary for the sale of the goods manufactured by the respondent. This finding of the learned Tribunal is a finding of fact and has not been challenged by the Department on the ground that no evidence was available to arrive at this finding. In view of this' finding which has remained unchallenged, the respondent was entitled to refund as it has satisfied all the conditions necessary for claiming such a refund. We, therefore, answer the question in the affirmative.
M.B.A./ C-14/ K Question answered in affirmative.
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