Input tax rebate cannot be partly disallowed on mere assumption where separate accounts and statutory forms prove distinct stock transfers.

Separate day-to-day accounts and supporting Forms C and F established distinct inter-State purchases of seeds, manufacture of oil, and stock transfer of the resulting goods. Because the record did not support the assumption that locally purchased seeds were used in the stock-transferred oil, the basis for partial disallowance failed. Rule 131 was therefore inapplicable on these facts, and the assessee's claim to full input tax rebate was upheld without partial reduction.

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Issues: Whether the assessee was entitled to input tax rebate without partial disallowance where it maintained separate accounts and produced Forms C and F to show inter-State purchase of seeds and stock transfer of the resulting oil.

Analysis: The assessee maintained separate day-to-day accounts for seeds purchased in inter-State trade, oil manufactured from those seeds, and supplies made outside the State by way of consignment sale. The record also contained supporting Forms C and F. The lower authorities proceeded on an assumption that locally purchased seeds had been used in the oil sent on stock transfer basis, but there was no material to support that conclusion. In these circumstances, the formula-based partial rebating under Rule 131 was held inapplicable, and the assessee's claim remained unrebutted.

Conclusion: The partial disallowance of input tax rebate was not justified, and the assessee succeeded on the merits.

Final Conclusion: The Tribunal's view was sustained, and no interference was called for with respect to the assessee's entitlement to full relief on the input tax issue.

Ratio Decidendi: Where the assessee's accounts and statutory forms reliably establish separate identity of inter-State purchases and stock-transferred goods, a disallowance based on mere assumption cannot stand and Rule 131 has no application.

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