Tax deduction for groundnut oil sales depends on statutory conditions, not exact input-output matching.

Rule 25 of the Andhra Pradesh General Sales Tax Rules, 1957 allows deduction for groundnut or kernel value only where the oil sold forms part of the dealer's turnover, tax has been paid on that sale, and tax has also been paid on the relevant purchase. Exact correlation between the precise quantity of input purchased and the quantity of oil sold is not required; the dealer need only prove compliance with the rule's conditions through the accounts, and the formula applies by taking the lesser quantity shown in the accounts or worked out under the explanation. The burden of establishing entitlement remains on the dealer, and the Tribunal was incorrect in treating earlier consent-based decisions as governing principle.

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Issues: Whether rule 25 of the Andhra Pradesh General Sales Tax Rules, 1957 entitled a groundnut oil manufacturer to deduction of the value of groundnut and kernel purchased and converted into oil and cake, and whether such deduction required correlation between the exact quantity of input purchased and the quantity of oil sold.

Analysis: Rule 25(2), read with rule 6(1)(k), grants a deduction only when the oil sold is included in the dealer's total turnover and tax has been paid on that sale, and when tax has also been paid on the purchase of the groundnut or kernel whose value is claimed as deduction. The rule does not require the dealer to identify the precise quantity of groundnut or kernel used for a given quantity of oil; it is enough if the accounts show the purchases on which tax was paid, subject to the rule's formula, under which the lesser of the quantity shown in the accounts and the quantity worked out by the explanation is taken for deduction. The burden remains on the dealer to establish compliance with the rule's conditions.

Conclusion: The Tribunal was wrong in treating earlier consent-based decisions as laying down governing principles, and the rebate had to be determined according to rule 25 and rule 6(1)(k) as construed above. The revision was therefore allowed in part and the matter was remitted to be decided afresh in accordance with those principles.

Ratio Decidendi: A statutory deduction under a taxing rule is available only on proof that the rule's express conditions are satisfied, and where the rule supplies a formula for quantification, exact input-output correlation is unnecessary if the dealer otherwise establishes entitlement.

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