Tax set-off claim failed for want of proof linking scrap purchases to the source of taxable scrap sales.

Set-off of tax under G.O. Ms. No. 173 was denied because the petitioner failed to prove that the aluminium scrap purchased could be linked to the scrap vehicles sold by the A.P. State Road Transport Corporation. The Tribunal treated the absence of bills from the alleged sellers and the failure to establish source linkage as findings of fact, which defeated the claim for set-off. On that factual basis, section 7-A(1-A) of the A.P. General Sales Tax Act, 1957 was held to have no relevance to the claim, and the revision was dismissed.

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Issues: Whether the petitioner was entitled to set-off of tax under G.O. Ms. No. 173, Revenue (S) Department, dated 13 February 1986, and whether the purchases of aluminium scrap could be linked to the scrap sold by the A.P. State Road Transport Corporation so as to justify the claimed set-off.

Analysis: The Tribunal had rejected the claim because the material produced did not contain bills issued by the alleged sellers to the petitioner, and the scrap purchased by the petitioner could not be linked with the scrap vehicles sold by the A.P. State Road Transport Corporation. The finding recorded was one of fact, and the petitioner had failed to establish the necessary linkage between the source of the scrap and the finished goods on which set-off was sought. In view of that factual finding, subsection (1-A) of section 7-A of the A.P. General Sales Tax Act, 1957 was held to have no relevance to the claim.

Conclusion: The claim for set-off was rejected and the revision was dismissed.

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