Statutory set-off is available only against sales tax actually payable; nil-rated manufactured goods defeat the claim.

A registered dealer's set-off under section 18B(2) of the Bombay Sales Tax Act, 1953 is confined to adjustment against sales tax actually payable on the manufactured goods under section 8. The statutory relief is not an independent refund of tax on raw materials or inputs. Where the manufactured goods attract a nil rate and no sales tax is payable, there is no tax liability against which the set-off can operate. The amendment to section 18B did not remove this condition, because the scheme still limits set-off to cases where sales tax is payable.

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Issues: Whether a registered dealer is entitled to claim set-off under section 18B(2) of the Bombay Sales Tax Act, 1953, when the manufactured goods attract no sales tax under section 8 of that Act.

Analysis: Section 18B(1) authorises rules for drawback, set-off and refund, but section 18B(2) requires that the set-off be granted only against the sales tax payable by the dealer under section 8. The relief contemplated is therefore not an independent refund of taxes paid on raw materials, but an adjustment against sales tax actually payable on the manufactured goods. Where the manufactured goods carry a nil rate and no sales tax is payable under section 8, there is nothing against which the set-off can operate. The omission of the earlier proviso from the amended section did not remove this essential condition, because the statutory scheme still confines the relief to cases where sales tax is payable.

Conclusion: The dealer is not entitled to set-off where no sales tax is payable under section 8, and the claim fails.

Ratio Decidendi: A statutory set-off granted against sales tax payable under section 8 can be claimed only where such sales tax is actually payable; if the manufactured goods are not taxable, the claim is outside the scope of section 18B(2).

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