Sale price inclusion and certificate-based use of raw materials turn on prior ruling and actual use, not intention.

Service pool charges recovered from distributors were treated as part of the sale price under the Bombay Sales Tax Act, following the Court's earlier ruling, and the assessee succeeded on that question. For certified raw materials used to manufacture motor vehicles later retained for the assessee's own business, liability under the certificate-based scheme arose because the decisive test was the actual use of the manufactured goods, not the purchaser's initial intention. As the vehicles were not manufactured for sale but for the assessee's own use, the use was contrary to the certificate and the Revenue succeeded on that issue.

---

---

Issues: (i) Whether service pool charges recovered from distributors formed part of the sale price of the vehicles under section 2(29) of the Bombay Sales Tax Act, 1959. (ii) Whether the use of raw materials purchased under form 15 for manufacturing motor vehicles later retained for the assessee's own business amounted to use for another purpose so as to attract section 14(1) of the Bombay Sales Tax Act, 1959.

Issue (i): Whether service pool charges recovered from distributors formed part of the sale price of the vehicles under section 2(29) of the Bombay Sales Tax Act, 1959.

Analysis: The question was treated as covered by an earlier binding decision of the same Court on the same point. The charge recovered from distributors was therefore examined only on the basis of that prior ruling, without fresh independent reasoning.

Conclusion: The issue was answered in the affirmative and in favour of the assessee.

Issue (ii): Whether the use of raw materials purchased under form 15 for manufacturing motor vehicles later retained for the assessee's own business amounted to use for another purpose so as to attract section 14(1) of the Bombay Sales Tax Act, 1959.

Analysis: The statutory scheme required the goods to be purchased on the certificate and used in the manufacture of taxable goods for sale. Section 14(1) fastened liability where goods purchased under the certificate were in fact used contrary to that certificate. The decisive factor was the actual use of the manufactured goods, not the purchaser's intention at the time of purchase. Since the cars were admittedly retained for the assessee's own use and were not meant for sale, the use was contrary to the certificate and the differential tax consequence followed.

Conclusion: The issue was answered in the negative and in favour of the Revenue.

Final Conclusion: The references were disposed of by upholding the assessee's claim on the first question and the Revenue's contention on the second question, with no order as to costs.

Ratio Decidendi: Under section 14(1) of the Bombay Sales Tax Act, 1959, liability arises from the actual use of the goods manufactured from certified purchases, and not from the purchaser's initial intention, where such actual use is contrary to the certificate.

---