1980 PLP 338 (PTD)

4. The grievances of the petitioner before the Tribunal were summed up in para. 2 of the order dated 23‑10‑1970 which reads as under:- "The Department's grievance before us was that in the first place no such claim was made before the Sales Tax Officer and that the Appellate Assistant Commissioner should not have accepted the claim without verification as some of the sale may have been made to licensed manufacturers, as partly manufactured goods, whereas others to un licensed manufacture‑ii. While, therefore, the respondent may be entitled to refund in respect of the yarn consumed in the manufacture of taxable goods, there would be no refund in respect of the yarn sold and utilised for manufacture of note‑taxable goods."

2. It will appear that on the basis of the averments before it, the Tribunal passed the impugned order setting aside the assessment with the observation that the Sales Tax Officer should re‑examine the assessee's claim in respect of the sale of yarn of Rs. 21,

942. The Tribunal directed that the refund should be allowed to the extent the respondent can establish the consumption of yarn sold or consumed in the finally taxable goods produced therefrom.

6. It is against this order that the Commissioner filed a reference appli cation under subsection (1) of section 17 of the Sales Tax Act, 1951, raising the following question of law:‑‑ Whether on the facts and in the circumstances of the cask the Tribunal was right in holding that refund of sales tax was due to the assessee- Company on the sales of ready made yarn sold and consumed in the taxable goods produced therefrom by the purchasers?" The reference application was decided by the Tribunal by its order dated 20‑3‑1971. The Tribunal expressed the opinion that in the order passed on appeal it had issued directions to the Sales Tax Officer to allow refund only to the extent the respondent could establish the sales of yarn to licensed manufacturer or consumption, thereof in the finally taxable goods. The whole determination was, therefore, left open. It held that the question posed was thereof "only hypothetical and consequently calls for no reference." It is against this order that the Commissioner has approached this Court by an application under subsection (2) of section 17 of the Sales Tax Act, 1951.

7. The learned counsel for the petitioner relies on the defects pointed out by the Commissioner in para. 4 of the reference application, namely:‑ "that the assessee should be allowed refund of sales tax paid on the purchase of yarn sold and consumed in the finally taxable goods produced therefrom In law it is only the manufacturer of taxable goods who is entitled to refund of sales tax paid on partly manufactured gods." His attention was drawn to the Department's case before the Tribunal as recorded by it in para. 2 of the order dated 23‑7‑1910 which shows that the Department kept content with the claim for disallowance of refund of sales tax in respect of yarn sold to unlicensed manufacturers or consumed in the manufacture of non‑taxable goods. The Sales Tax Department did not dispute the entitlement of the assessee to claim refund in respect of sale of yarn made to licensed manufacturers, as partly manufactured goods, it objected to the allowance granted without verification of the fact as whether the purchaser was a licensed manufacturer or unlicensed manufacturer.

8. The learned counsel for the petitioner concedes that before the Tribunal the case was agitated to the limited extent Appellate Assistant Commissioner should not have allowed exemption in respect of yarn sold to licensed manufacturers or consumed in the manufacture of taxable goods without verification of the buyers being licensed or not and that this claim was accepted by the Tribunal which set aside the assessment.

9. We have given the matter our anxious consideration and feel satisfied that the Tribunal having accepted the contention of the Department and set aside the assessment for verification of the sales and consumption as aforesaid, the Department cannot feel aggrieved of the order of the Tribunal.

10. The question now posed for consideration was neither raised before the Tribunal nor arises out of its order.

11. The present petition is misconceived and is accordingly dismissed with costs. Petition dismissed.