The facts set out in the statement of the case by the Tribunal are briefly as follows : The respondent is a manufacturer of cotton textile, particularly of coarse and medium variety cloth. During the assessment period from April 1, 1955 to March 31, 1956, it C purchased unginned cotton worth Rs. 5,93,266/- from unregistered dealers and paid purchase tax of Rs. 5,932/- under s. lO(a) of the Bombay Sales Tax Act, 1953. The cotton was ginned and pressed by the respondent, the ginned cotton was· used in the manufacture of cotton textiles while the cotton seeds were sold by it. During the course of assessment proceedings the respondent applied for refund of purchase tax paid on the unginned cotton under the Bombay Sales Tax (Exemption, Set-off and Composition) Rules, 1954, (hereinafter referred to as the Rules). The Sales Tax Officer refused to allow any refund on the ground that the conditions of r. 12(1) read with r. 6(ii) of the Rules had not been fulfilled. The Assistant Collector of Sales Tax on appeal confirmed the order of the Sales Tax Officer on the ground that "rule 6(ii) is not applicable when subsidiary or incidental product alone is sold and the main product is used in the manufacture of other goods. Looking the working of the aforesaid Rule, al! the products of the unprocessed goods should be sold."
