Entry tax set-off is confined to the dealer who paid the tax; a purchaser cannot claim the same benefit.

A purchasing dealer could not claim set-off under proviso (vii) of section 3(1) of the Entry Tax Act merely because the goods had already suffered entry tax in the hands of the selling dealer. The proviso was construed to restrict the benefit to the dealer who had himself paid the entry tax and later disposed of those goods in the manner contemplated by the provision. The court held that the words referring to tax paid by him and adjustment against tax payable by him confined the set-off to the original paying dealer. The purchasing dealer was therefore not entitled to the set-off, and the issue was decided for the Revenue.

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Issues: Whether a purchasing dealer who bought goods on which entry tax had already been paid by the selling dealer was entitled to claim set-off under proviso (vii) of section 3(1) of the Entry Tax Act.

Analysis: The relevant proviso permitted set-off only where the tax on entry of the goods had been paid by a dealer and the same dealer later disposed of those goods in the manner contemplated by the proviso. The language used in the provision, especially the expressions referring to tax having been paid by a dealer, tax already paid by him, and adjustment towards tax payable by him, indicated that the benefit was confined to the dealer who had effected the entry and paid the tax. A purchaser from such dealer could not claim the same benefit merely because the goods purchased were tax-paid goods. Any broader interpretation would render the words by him ineffective and disturb the statutory scheme.

Conclusion: The purchasing dealer was not entitled to set-off under proviso (vii) of section 3(1) of the Entry Tax Act. The question was answered in the affirmative in favour of the Revenue and against the assessee.

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