Input-tax deduction under turnover rules requires proof of statutory conditions; exact one-to-one correlation is unnecessary when the rule supplies a formula.

Deduction for a registered manufacturer of groundnut oil and cake under rule 25 of the Andhra Pradesh General Sales Tax Rules, 1957 depends on strict satisfaction of the statutory conditions: the sale of oil must form part of total turnover and tax must be paid on that sale, tax must also have been paid on the relevant purchase of groundnut or kernel, and the dealer must prove entitlement from its accounts. Earlier consent-based decisions did not lay down binding principles on rebate. Exact one-to-one correlation between particular inputs and sales is unnecessary where the rule itself provides a formula for working out the deductible quantity, and the lesser quantity shown by the rule and accounts is taken.

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Issues: Whether the deduction or rebate available to a registered manufacturer of groundnut oil and cake under rule 25 of the Andhra Pradesh General Sales Tax Rules, 1957 is governed by the earlier consent-based decisions, and what conditions must be satisfied for claiming the deduction.

Analysis: The deduction under rule 25 is not to be worked out by treating the earlier matters as laying down a general principle, because those decisions turned on consent and did not construe the rule. Rule 25(2) allows a deduction equal to the value of groundnut and kernel purchased and converted into oil and cake, but only if the sale of oil is included in the dealer's total turnover and tax has been paid on such sale, and the dealer has also paid tax on the purchase of the groundnut or kernel sought to be deducted. The rule does not require exact correlation between a particular quantity of groundnut or kernel and a particular quantity of oil sold. It is enough if the accounts show the relevant purchases and tax payment, and the explanation provides the formula for comparing the quantities worked out under the rule with the quantities revealed in the accounts, the lesser being taken for deduction. The burden remains on the dealer to establish that all the rule's requirements are satisfied.

Conclusion: The earlier decisions did not lay down binding principles for rebate, and the Tribunal was wrong in treating them as governing the case. The matter had to be decided under rule 25 itself, on the principles stated by the Court, with the deduction available only upon satisfaction of the stipulated statutory conditions.

Final Conclusion: The revision succeeded in part. The Tribunal's order was modified, and the remand to the assessing authority was maintained with directions to decide the matter according to the Court's interpretation of rule 25.

Ratio Decidendi: A tax deduction under a special turnover rule is available only when the statutory conditions precedent are satisfied, and the dealer claiming the benefit bears the burden of proving entitlement; exact one-to-one correlation of inputs and sales is unnecessary where the rule itself provides a formula for working out the deductible quantity.

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