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2017 DIGILAW 323 (GUJ)

Isaan Overseas Ltd. v. State of Gujarat

2017-02-08

B.N.KARIA, M.R.SHAH

body2017
JUDGMENT : M.R. Shah, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter referred to as "Tribunal") in Second Appeal No. 590/2005 by which the learned Tribunal has partly allowed the said appeal preferred by the appellant herein, however has rejected the claim for set off under Rule 44 of the Gujarat Sales Tax Rules, 1970 (hereinafter referred to as "Rules, 1970") for the purchase from three dealers viz. (1) Virkrupa Trading Company; (2) Uma Trading Company and (3) New Bhumi Enterprise for the sum of Rs.12,62,84,840/-, the purchaser has preferred the present Tax Appeal requesting to consider the following substantial question of law. "Whether in the facts and circumstances of the case, the Tribunal erred in confirming the disallowances under Rule 44 of the Gujarat Sales Tax Rules, 1970, since the purchases were made by the appellant from a party, who in turn had purchased it from a dealer whose registration at the relevant time was valid, only on the ground that subsequently such registration was canceled with retrospective effect?" 2. Facts leading to the present Tax Appeal in nut-shell are as under: 2.1 That the appellant herein-M/s. Isaan Overseas Ltd. (hereinafter after referred to as "purchaser") was running business of reselling as well as exporting castor oil. That during the course of inter-State sale it purchased the goods from 5 dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company, (3) New Bhumi Enterprise, (4) Urvil Sales Corporation and (5) Urvil Exim Ltd., Ahmedabad. That the purchaser claimed the set off under Rule 44 of the Rules, 1970 for the purchase from the aforesaid dealers for the sum of Rs.29,55,25,210/-. That the purchaser also produced Form 40. The said claim of set off came to be adjudicated upon by the Assessing Officer. That the purchaser claimed the set off under Rule 44 of the Rules, 1970 for the purchase from the aforesaid dealers for the sum of Rs.29,55,25,210/-. That the purchaser also produced Form 40. The said claim of set off came to be adjudicated upon by the Assessing Officer. The Assessing Officer found that as originally from whom the aforesaid sellers purchased the goods who in turn sold it to the purchaser had not paid the tax on the aforesaid transactions and as the registration of the dealer (Shreeji Agro) was canceled ab initio on non-payment of the tax and therefore, as the original dealer had not paid the tax and that the purchaser had failed to satisfy that the original dealer had paid the tax of which the set off is claimed, the purchaser is not entitled to set off under Rule 44 of the Rules, 1970. Thereby the Assessing Officer rejected the set off claimed by the purchaser. 2.2 Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer rejecting the set off claimed by the purchaser, the purchaser preferred appeal before the first appellate authority. That the first appellate Authority dismissed the said appeal. Against the order passed by the first appellate authority, the purchaser preferred Second Appeal No. 590/2005 before the learned Tribunal. That by impugned judgment and order the learned Tribunal has partly allowed the said appeal. That the learned Tribunal has confirmed the order passed by the Assessing Officer as well as the first Appellate Authority rejecting the claim for set off under Rule 44 of the Rules, 1970 for purchase from three dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company and (3) New Bhumi Enterprise for a sum of Rs.12,62,84,840/-. However, with respect to the claim for set off on transaction with respect to two dealers viz. (1) Urvil Sales Corporation and (2) Urvil Exim Ltd. for sum of Rs.16,92,41,063/- the learned Tribunal has set aside the assessment order as well as the order passed by the first Appellate Authority and has remanded the matter to the first Appellate Authority for reconsideration on merits and by observing that the concerned Officer to inquire and decide whether the tax is paid in the government or not and if concerned Officer receives material about non-payment of the tax with the government, claim can be rejected. 2.3 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal insofar as dismissing the appeal preferred by the purchaser and confirming the assessment order dated 30.10.2004 and appeal order dated 10.06.2005 rejecting the claim for set off for the purchases from the aforesaid three dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company and (3) New Bhumi Enterprise for the sum of Rs.12,62,84,840/-, the purchaser has preferred the present Appeal to consider the aforesaid question of law. 3. In the facts and circumstances of the case and looking to the controversy in the appeal which goes to the root of the matter, the following additional substantial question of law is framed. "Whether submitting Form 40 signed by the dealer can be said to be conclusive proof of payment of tax by the dealer, while claiming the set off under Rule 44 of the Rules, 1970 and whether on submitting Form 40 by the purchaser, who claimed set off the onus is thereafter upon the Assessing Officer to hold inquiry whether the tax of which the set off is claimed under Rule 44 of the Rules, 1970 has been deposited in the government by the dealer or not?" 4. Shri Dipen Desai, learned Advocate has appeared on behalf of the appellant - purchaser and Shri Hardik Vora, learned Assistant Government Pleader has appeared on behalf of the respondent State. 5. Shri Desai, learned Advocate appearing on behalf of the appellant has vehemently submitted that in the facts and circumstances of the case the learned Tribunal has materially erred in confirming the order passed by the Assessing Officer in rejecting the set off claim of the purchaser with respect to the transaction with three dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company and (3) New Bhumi Enterprise for a sum of Rs. 12,62,84,840/-. 5.1 It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that on one hand the learned Tribunal has remanded the matter to the first Appellate Authority with respect to similar transactions with (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., however, has confirmed the order passed by both the authorities below with respect to set off claimed with respect to transactions with other three dealers. It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that with respect to the transactions of (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., the learned Tribunal has remanded the matter to the first Appellate Authority by observing that on production/submission of Form 40, thereafter the Assessing Officer is required to hold inquiry whether on such transactions of which the set off is claimed, the tax has been paid in the government by the original dealer or not. It is submitted that in the present case also with respect to transactions with other three dealers also, Form 40 was submitted. It is submitted that even the transactions with the aforesaid three dealers was also originally from Shreeji Agro, similarly like transactions with other two companies viz. (1) Urvil Sales Corporation and (2) Urvil Exim Ltd. It is submitted that therefore with respect to the remaining three transactions with (1) Virkrupa Trading Company and (2) Uma Trading Company and (3) New Bhumi Enterprise also, the learned Tribunal ought not to have confirmed the orders passed by the authorities below and ought to have remanded the matter by observing that on submission of Form 40, thereafter, it is for the Assessing Officer to hold inquiry whether the tax on the transactions of which the set off is claimed has been paid by the original dealer or not. 5.2 It is further submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that even otherwise the purchaser purchased the goods by way of inter-State sale from 5 dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company, (3) New Bhumi Enterprise, (4) Urvil Sales Corporation and (5) Urvil Exim Ltd., who purchased the goods from one Shreeji Agro. It is submitted that the purchaser submitted Form 40 signed by the dealers from whom the purchaser purchased the goods during inter-State sale. It is submitted that merely because subsequently the registration of the original dealer i.e. in the present case Shreeji Agro came to be canceled ab initio, the subsequent purchaser cannot be denied the set off solely on the aforesaid ground i.e. on the ground that the registration of the original dealer has been canceled subsequently ab initio. It is submitted that merely because subsequently the registration of the original dealer i.e. in the present case Shreeji Agro came to be canceled ab initio, the subsequent purchaser cannot be denied the set off solely on the aforesaid ground i.e. on the ground that the registration of the original dealer has been canceled subsequently ab initio. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of Maharashtra vs. Suresh Trading Company reported in (1997) 11 SCC 378 . 5.3 It is further submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that even otherwise considering the language used in Rule 44, when the purchaser submits the Form 40 signed by the dealer, there is a presumption that the tax on the transaction on which the set off is claimed by the dealer, the same can be said to be conclusive proof of payment of tax by the dealer. It is submitted that therefore once the initial onus is discharged by the purchaser by submitting Form 40, thereafter it is for the Assessing Officer to disprove the same by holding the inquiry that whether the tax of which the set off is claimed has been paid by the original dealer or not. It is submitted that therefore when in the present case the purchaser had submitted the Form 40 signed by the dealers from whom the appellants purchased the goods during the course of inter-State sale, purchaser is entitled to set off under Rule 44 of the Rules, 1970 for the purchase from dealers from whom the purchaser has purchased the goods during inter-State sale. 5.4 Alternatively, it is submitted that as by impugned judgment and order the learned Tribunal has remanded the matter to the first Appellate Authority with respect to the purchase from the dealers viz. (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., even the claim for set off from the purchase from the remaining three dealers is required to be remanded to either first Appellate Authority or to the original Assessing Officer, as there is no difference in transaction with Urvil Sales Corporation and Urvil Exim Ltd. on one hand and the purchases from the remaining three dealers i.e. (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise. Making above submissions and relying upon above decision, it is requested to answer the question in favour of the purchaser and against the Revenue. 6. Present Tax Appeal is vehemently opposed by Shri Hardik Vora, learned Assistant Government Pleader appearing on behalf of the State Revenue. 6.1 It is vehemently submitted that in the facts and circumstances of the case more particularly when the purchaser has failed to lead the evidence and/or purchase any material to show that on the transactions from the three dealers viz. (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise of which the set off is claimed, the original dealer has paid/deposit any tax with the government, all the authorities below have rightly rejected the claim for set off under Rule 44 of the Rules, 1970 for the purchase from the aforesaid three dealers. It is submitted that as per Rule 44 more particularly Rule 44C of the Rules, 1970, unless and until the purchaser proves and/or satisfies that the original dealer has paid the tax, such purchaser is not entitled to any refund and/or set off under Rule 44 of the Rules, 1970. 6.2 Now, so far as the submission on behalf of the purchaser that Form 40 can be said to be conclusive proof and therefore, on furnishing/submitting Form 40, the purchaser has discharged its onus and therefore, automatically on furnishing Form 40 the purchaser is entitled to the set off claimed is concerned, it is vehemently submitted that language used in Rule 44 is very clear. It is submitted that as per Rule 44, twin conditions are required to be fulfilled viz. the assessee has to prove to the satisfaction of the adjudicating Authority/Commissioner that the tax has been paid by the original dealer and that the assessee is required to produce certificate in Form 40 issued by the dealer. 6.3 It is submitted that even in Form 40 the words used are, "tax paid paid/will be paid". It is submitted that if in Rule 40 the word used are "tax will be paid" in that case, the submission of Form 40 cannot be said to be conclusive proof of payment of tax by the original dealer. 6.3 It is submitted that even in Form 40 the words used are, "tax paid paid/will be paid". It is submitted that if in Rule 40 the word used are "tax will be paid" in that case, the submission of Form 40 cannot be said to be conclusive proof of payment of tax by the original dealer. It is submitted that therefore, considering Rule 44 of the Rules, 1970, burden is upon the claimant/purchaser who claims the set off to establish and prove by producing necessary material that the tax has been paid on the transactions during the inter-State sale by the original dealer of which the set off is claimed. It is submitted that thereafter if the Assessing Officer doubts the same, is required to hold the inquiry whether in fact the tax for which set off is claimed has been paid by the original dealer or not. 6.4 It is submitted that in the present case admittedly goods were purchased by the dealer from whom the purchaser has purchased the goods from one Shreeji Agro whose registration has been canceled ab initio on non-payment of tax. It is submitted that even the dealer has not claimed any set off in monthly, quarterly and yearly return. 6.5 It is submitted that even the findings recorded by the learned Tribunal are contradictory findings with respect to the purchases from (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise on one hand and (1) Urvil Sales Corporation and (2) Urvil Exim Ltd. on other hand. It is submitted that with respect to the purchases from three dealers viz. (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise, the learned Tribunal has observed and held that submitting Form 40 alone is not sufficient and/or conclusive proof to establish and prove that tax on such transaction has been paid. However, with respect to other two transactions/purchasers the learned Tribunal has held contrary and has held that after Form 40 is submitted, thereafter it is for the Assessing Officer to hold the inquiry, whether the tax on the said transactions has been paid by the original dealer or not. However, with respect to other two transactions/purchasers the learned Tribunal has held contrary and has held that after Form 40 is submitted, thereafter it is for the Assessing Officer to hold the inquiry, whether the tax on the said transactions has been paid by the original dealer or not. However, has fairly conceded that against the impugned judgment and order passed by the learned Tribunal with respect to purchase from the remaining two i.e. (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., the State has not preferred any appeal so far. Shri Vora, learned Assistant Government Pleader has submitted that however in the facts and circumstances of the case, with respect to the purchases from (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise, the learned Tribunal has rightly rejected the claim for set off under Rule 44 of the Rules, 1970. Making above submissions it is requested to dismiss the present Tax Appeal and answer the questions in favour of the Revenue and against the purchaser. 7. Heard learned Counsel appearing for respective parties at length. The short question which is posed for consideration of this Court is whether while claiming the set off under Rule 44 of the Rules, 1970, Form No. 40 signed by the dealer, produced by the purchaser can be said to be conclusive proof of payment of tax by the dealer. While considering the aforesaid question, Rule 44 of the Rules, 1970 is required to be referred to, which reads as under: "44. Drawback, set-Off or refund of tax or the purchases of goods sold in the course of Inter-State trade or commerce, or of export out of the territory of India or transported to a place outside the State of Gujarat. In assessing the tax payable by a Registered dealer (hereinafter referred to as the "assessee") the Commissioner shall, subject to the general conditions of rule 47, and further conditions specified below, grant him a drawback, set-off or as the case may be refund, or the whole or any part of the tax in respect of the purchases of goods sold in the course of inter-State trade or commerce or of export out of the territory of India or transported to a place outside the State of Gujarat. Conditions:- (1) the assessee is a registered dealer as defined in clause (25) of section 2 of the Act; and (2) the goods being taxable goods. (A) have been resold by the assessee in the course of inter-State trade or commerce or of export out of the territory of India, within six months from the date of purchase thereof, or (B) have been transported by the assessee outside the State of Gujarat but within India, to his own place of business or as the case may be, to the place of business of his agent or of his principal, within six months from the date of purchase thereof and are sold there, or (C)(i) have been despatched by the assessee outside the territory of India, to his own place of business or to the place of business of his agent or of his principal or as the case may be, to any other person with the intention of selling such goods to the said person, and (ii) the goods have been actually resold there by the assessee, his agent or, as the case maybe, his principal:- (a) within a period of thirty-six months from the date of purchase thereof, if the goods are precious stones, synthetic or artificial precious stones and pearls, real, artificial or cultured, (b) within a period of eighteen months from the date of purchase thereof if the goods are raw wool; and (c) in the case of any other class of goods within a period of twelve months from the date of the purchase of such goods, and the assessee produces a certificate in Form 41 issued by the person-in-charge of his said place of business or as the case may be the agent or principal stating that the goods are resold there and the date of resale thereof. Extent of drawback, set-off etc., shall be the amount calculated in accordance with clauses (B) and (C) hereunder subject to the proviso:- (A) [XXX] (B) For the purchases of goods on or after the appointed day - (i) in respect of the purchases made on or after the appointed day, from a registered dealer without giving any certificate under section 12 or 13 of the Act - (a) the amount of sales tax or of general sales tax recovered separately under the Act, (b) the amount calculated in accordance with the formula hereunder where the amount of sales tax or of general sales tax has not been so recovered separately, Formula: (9P x R)/(10 x 100+R) (where 'P' means the purchase price of the goods and 'R' means the rate of sales tax or of general sales tax (whichever has not been recovered separately), applicable to the respective goods under the Act, at the relevant time of purchase thereof): PROVIDED that the assessee proves to the satisfaction of the Commissioner that the relevant tax leviable under the Act has been paid or has become payable on an earlier transaction in the same goods and produces a certificate in Form 40 issued by the dealer from whom such goods were purchased by the assessee, stating inter alia that the sale of the same goods has been or will be included in his turnover of sales and the amount of tax payable, if any, by him under the Act, on such turnover has been or as the case may be, will be paid within the time laid down in rule 31. (ii) The amount of sales tax alone recovered separately on the purchases of goods described in Schedule III against a certificate in Form 17 under item (ii) of sub-clause (A) of sub-section (1) of section 13 of the Act. (ii) The amount of sales tax alone recovered separately on the purchases of goods described in Schedule III against a certificate in Form 17 under item (ii) of sub-clause (A) of sub-section (1) of section 13 of the Act. (iii) The amount of purchase tax paid or payable under section 15 or 16 of the Act: PROVIDED that the aggregate of the amounts, if any, calculated in accordance with the clause (A) and (B) above, shall be granted to the assessee after deducting therefrom four per cent of the sales price of the goods, where the sale of the said goods is made at any place within India but outside the State of Gujarat, the goods having been transported there, by the assessee to his own place of business or to the place of his agent or as the case may be, or his principal, on or after the appointed day: PROVIDED FURTHER that in respect of the goods falling in entries 1 and 2 in Schedule E of the Bombay Sales Tax Act, 1959 purchased by the assessee before the appointed day and held by him in stock on the appointed day, and in respect of the goods falling in entries 1 and 2 in Schedule II of the Act purchased by the assessee on or after the appointed day, the amount to be deducted under the aforesaid proviso, shall be calculated at the rate of one half per cent only of the sale price of such goods. (C) Notwithstanding anything contained in clause (A) or clause (B) above- (i) no drawback, set-off or as the case may be, refund shall be granted under this rule where the assessee is entitled to refund under section 53 of the Act on the inter-State sales of declared goods; (ii) no drawback, set-off or as the case may be, refund shall be granted under this rule in respect of the purchases of those goods, which have been resold by the assessee in the course of the inter-State trade or commerce and where on such resales, no tax under the Central Sales Tax Act, 1956 is actually payable by the assessee on account of any deduction admissible under any of the provisions of the said Act. (iii) no drawback, set-off or as the case may be refund shall be granted under this rule, where the vendor who has sold goods to the claimant, dealer has not credited in government treasury, the amount of tax on his sales for which set off is claimed.]" At this stage Form No. 40 is also required to be reproduced which is as under: "FORM 40 [See rules 42, 43, 44 and 45] Certificate of sailing dealer who is a registered dealer I ........................................of Messrs…..................................do certify that I/the said.........................................(firm, company, etc.) am/is a Registered dealer holding certificate or Registration Number …............... dated ............................ that the sales of goods specified in my the said ............................... (firm, company, etc.) bill/cash in memo invoice number …................ date ................... and said/to Shri Messrs ................ holding certificate of Registration Number .................... dated .......... without obtaining from him/them any of then certificate prescribed under rules 24 of the Gujarat Sales Tax Act. 1970 or any of the certificates prescribed under any of the notification issued section 49 of the Act. have been will be included by me/the said.............(firm, company etc.) in the turnover of sales on which the amount of tax payable if any, in accordance which section 7, 8 or 10 of the Gujarat Sales Tax Act. 1969 has been/will be paid within the time specified in rules 31. 7.1 Thus, considering the proviso to Rule 44 of the Rules, 1970, if the assessee proves to the satisfaction of the Commissioner that the relevant tax leviable under the Act has been paid or has become payable on an earlier transaction on the same goods and produces a certificate in Form 40 issued by the dealer from whom such goods were purchased by the assessee, stating inter alia that the sale of the same goods has been or will be included in his turnover of sales and the amount of tax payable, if any, by him under the Act, on such turnover has been or as the case may be, will be paid within the time laid down in rule 31, the assessee/purchaser shall be entitled to set off of such tax paid by the original dealer. Thus, the onus is upon such assessee who claims set off, to prove to the satisfaction of the Commissioner that the tax of which the set off is claimed has been paid by the original dealer from whom he has purchased the goods. Simultaneously, the assessee is also required to produce certificate in Form 40 issued by the dealer from whom such goods were purchased by the assessee. Even if one looks at Form 40 the dealer certifies that either the tax has been paid or will paid within the time, specified in Rule 31. Therefore, submission of Form 40 cannot be said to be the conclusive proof to prove the actual payment of tax by the original dealer. The onus is upon the assessee who claims set off, to prove to the satisfaction of the Commissioner that the relevant tax is paid by the original dealer from whom such goods were purchased by the assessee. Therefore, the submission on behalf of the assessee that once the Form 40, signed by the dealer is produced by the assessee, the same can be said to be conclusive proof and no other evidence is required to be produced to show the actual payment of tax, cannot be accepted. As observed hereinabove, in Form 40, the dealer certifies that either the tax has been paid or will be paid. If in a given case in Form 40 the dealer certifies that 'the tax will be paid within the time specified under Rule 31', in that case thereafter again it is required to be proved that thereafter the tax has been paid within time limit specified under Rule 31. Therefore, submission of Form 40 cannot be said to be a conclusive proof with respect to actual payment of tax by the original dealer. 7.2 On considering the impugned judgment and order passed by the learned Tribunal, it appears that there are as such contradictory findings by the learned Tribunal. On one hand the learned Tribunal has observed that Form 40 cannot be said to be conclusive proof. On the other hand the learned Tribunal has remanded the matter to the first Appellate Authority with respect to other two transactions, directing the first Appellate Authority to verify whether the actual tax has been paid by the original dealer or not. On one hand the learned Tribunal has observed that Form 40 cannot be said to be conclusive proof. On the other hand the learned Tribunal has remanded the matter to the first Appellate Authority with respect to other two transactions, directing the first Appellate Authority to verify whether the actual tax has been paid by the original dealer or not. However, the State has not preferred the appeal with respect to other two transactions for which the remand is made by the learned Tribunal. 8. In view of the above and for the reasons stated above, while holding that while claiming the set off under Rule 44, the assessee is required to satisfy the Commissioner by producing the relevant material to prove that actual tax has been paid by the original dealer and is also required to produce certificate in Form 40 issued/signed by the dealer from whom such goods were purchased by the assessee and only in case when the aforesaid twin conditions are satisfied, the assessee shall be entitled to the set off of the tax paid by the original dealer. However, as with respect to other two transactions the learned Tribunal has remanded the matter to the first Appellate Authority which according to the appellant are similar to that of other three transactions for which the learned Tribunal has rejected the appeal and the order with respect to other two transactions has attained the finality, we deem it fit to remand the matter to the adjudicating Authority to consider the set off claimed by the assessee in light of the observations made hereinabove i.e. the assessee has to prove to the satisfaction of the adjudicating Authority/Commissioner that the tax has been paid by the original dealer and that the assessee is also required to produce certificate in Form 40 issued by the dealer. As observed hereinabove when the aforesaid twin conditions are satisfied, then and then only the assessee shall be entitled to the set off, otherwise not. 9. In view of the above and for the reasons stated above, present Tax Appeal succeeds in part. As observed hereinabove when the aforesaid twin conditions are satisfied, then and then only the assessee shall be entitled to the set off, otherwise not. 9. In view of the above and for the reasons stated above, present Tax Appeal succeeds in part. The impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad in Second Appeal No. 590/2005 is hereby quashed and set aside and the matter is remanded to the adjudicating Authority to consider the set off claimed by the assessee afresh in light of the observations made hereinabove. With the consent of learned Advocates appearing for respective parties and even with respect to other two transactions for which the learned Tribunal has remanded the matter to the first Appellate Authority, the same is remanded to the Adjudicating Authority. The aforesaid exercise shall be completed within the period of 3 months from the date of receipt of the present order. The appellant is hereby directed to cooperate with the adjudicating Authority in early conclusion of the adjudicating proceedings. It is made clear that this Court has not expressed anything on merits whether the appellant shall be entitled to the set off as claimed or not. If the assessee proves to the satisfaction of the Commissioner/adjudicating Authority that the amount of tax has been paid on the goods for which the set off is claimed along with Form 40 then and then only the assessee shall be entitled to the set off under Rule 44 of the Rules, 1970. Present Tax Appeal is partly allowed to the aforesaid extent. No costs. /Department.