Bullion exemption under sales tax rules does not cover refined bullion made by melting gold ornaments.

Rule 5(b) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954 exempts sales of bullion prepared by melting, mixing or refining bullion purchased from registered dealers, but its proviso excludes bullion produced by melting ornaments or other gold or silver articles. The provision therefore applies only to bullion in its ordinary course and not to refined bullion derived from ornaments. On the stated facts, the applicants bought old ornaments and other gold articles and sold refined bullion, bringing the transaction within the proviso. Exemption under rule 5(b) was therefore unavailable, and no alternative basis for exemption was shown.

---

---

Issues: Whether the applicants were entitled to the benefit of rule 5(b) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954, in respect of bullion sold after melting or refining ornaments and bullion.

Analysis: Rule 5(b) exempted sales of bullion prepared by melting, mixing or refining bullion purchased from registered dealers, but the proviso excluded sales of bullion prepared by melting any ornament or article made of gold or silver, either alone or partly with bullion. The statutory scheme therefore protected only sales of bullion in its ordinary course and not sales resulting from melting ornaments. On the findings recorded, the applicants purchased old ornaments and other gold articles and sold refined bullion, so the transaction fell within the proviso. The benefit under rule 5(b) was unavailable, and no other provision was shown to support exemption.

Conclusion: The applicants were not entitled to exemption under rule 5(b), and the assessment was upheld against them.

---