Purchase tax refund turns on actual use of goods, not purchase-time intention, under the sales tax exemption rules.

Refund of purchase tax under rule 12(1) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 depended on actual use of the purchased goods for the specified purpose, not on the purchaser's intention at the time of purchase. The Court distinguished rule 6(ii), which required a declaration of intended use for producing scheduled goods for sale, from rule 12(1), which focused on whether the goods were in fact used to produce goods listed in the Schedule. As the unginned cotton was actually used to produce cotton seeds that were sold, the statutory conditions for refund were satisfied.

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Issues: Whether the respondent mill was entitled to refund of purchase tax under rule 12(1) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954, and whether the expression "purpose specified in the said clause" in rule 12(1) required the goods to be intended at the time of purchase for producing the scheduled goods for sale.

Analysis: Rule 6(ii) contemplated a declaration that the goods purchased were intended to be used for producing the corresponding scheduled goods for sale, but rule 12(1) was concerned with actual use of the purchased goods for the specified purpose. The intention existing at the time of purchase was held to be irrelevant for refund under rule 12(1). What mattered was whether the goods were in fact used for producing any of the goods mentioned in column 2 of the Schedule for sale. Since the unginned cotton was actually used to produce cotton seeds, which were sold, the statutory conditions for refund were satisfied.

Conclusion: The respondent was entitled to refund under rule 12(1), and the appeal failed.

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