Deduction for tax-paid goods and reference to a larger Bench where co-equal rulings conflict on the same legal issue

Tax-paid goods under the Madhya Pradesh General Sales Tax Act, 1958 are purchases from a registered dealer, and such sales are excluded from taxable turnover. The document states that the issue whether deduction remains available when the selling dealer's registration is later cancelled, or the dealer is alleged to be bogus or fictitious, is a question of law rather than a mere question of fact. It also notes that where co-equal Benches have taken different views on the same point, the matter should be referred to a larger Bench under the applicable rules. Accordingly, the assessee's claim required reference of the legal questions for opinion.

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Issues: Whether the assessee was entitled to deduction in respect of sales of tax-paid goods purchased from a dealer whose registration had been cancelled later, and whether the Tribunal ought to have referred the matter to a larger Bench when earlier decisions of equal jurisdiction had taken a different view.

Analysis: Under the Madhya Pradesh General Sales Tax Act, 1958, tax-paid goods are those purchased from a registered dealer, and taxable turnover is determined after excluding such sales. The Court held that the controversy whether purchases from a dealer later found to be bogus or fictitious still attract the deduction is not a mere question of fact but a question of law. The Court also noted that where Benches of equal jurisdiction have taken divergent views on the same point, the matter should be referred for decision by a larger Bench in accordance with the applicable rules.

Conclusion: The assessee's claim raised questions of law and the Tribunal was required to refer those questions for opinion.

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