Division-wise sales tax rebate computation upheld where separate manufacturing units kept distinct accounts and identifiable inputs and outputs.

Separate manufacturing divisions with distinct products and separate accounts were required to have their turnover and tax rebate computed division-wise under section 15A of the Haryana General Sales Tax Act, 1973 read with rules 24A and 24B of the Haryana General Sales Tax Rules, 1975, where the input goods used in each division were clearly identifiable with the corresponding output. Clubbing the turnovers would distort the rebate calculation and create cross-subsidisation, so a segregated and pro rata computation was justified. The court answered the issue against the assessee and upheld separate computation of rebate and tax liability.

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Issues: Whether, for the purpose of tax rebate and levy of tax under section 15A of the Haryana General Sales Tax Act, 1973 read with rules 24A and 24B of the Haryana General Sales Tax Rules, 1975, the turnover and accounts of two separately maintained manufacturing divisions of the assessee were required to be clubbed together or could be segregated and computed separately.

Analysis: The two divisions manufactured different goods, maintained separate accounts, and the goods purchased for use in manufacture were clearly identifiable with the output of each division. The adjustment of tax paid on inputs was linked to the tax payable on the corresponding manufactured goods, and where the goods and their disposal could be identified division-wise, clubbing the turnovers would distort the rebate calculation and amount to cross-subsidisation. The legal framework under section 15A and rules 24A and 24B justified computation on a separate and pro rata basis for each division.

Conclusion: The turnover of the two divisions was rightly split and segregated for computing rebate and tax liability, and the question was answered against the assessee.

Ratio Decidendi: Where separate manufacturing divisions maintain separate accounts and the input goods are clearly identifiable with the corresponding output, tax rebate under the relevant sales tax provisions may be computed division-wise on a segregated and pro rata basis rather than by clubbing the turnovers.

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