TaxTMI 
TaxTMI 
1991 (4) TMI 363
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bombay Sales of Motor Spirit Taxation Rules, 1958 (hereinafter referred to as "the Rules"). The learned single Judge as well as the Division Bench of the Bombay High Court dismissed the writ petition and as such the petitioners have now come before this Court by special leave petition filed under article 136 of the Constitution. In order to appreciate the controversy we would state the facts in short. Karfule P. Ltd., petitioner No. 1, is a private limited company registered under the Companies Act, 1956, and Mr. Florence Gabriel Sequeria, petitioner No. 2, is the director of the above company. The petitioners are doing the business of selling petrol, motor spirit and allied products at their petrol pump at Ballard Estate, Bombay. The p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f litigation by filing Writ Petition No. 2974 of 1989 challenging the vires of rule 15(3) of the Rules. The learned single Judge held that after going through the affidavit-in-reply and reading the provisions of rule 15(3), he was satisfied that the petition was misconceived. In the opinion of the learned Judge even if the said rule was struck down, it will not benefit the petitioners or others similarly situated. The petition was accordingly dismissed by order dated November 27, 1989. An appeal filed before the Division Bench was dismissed in limine by order dated June 4, 1990. The petitioners purchased the motor spirit from the licensed traders, viz., (1) Indian Oil Corporation Ltd., (2) Bharat Refineries Ltd., (3) Hind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owed by the trader who has sold such motor spirit." So far as the above rule is concerned, it comes into play only where the purchasing trader stores the motor spirit in a storage installed and belonging to the selling trader and the loss on account of evaporation or leakage takes place while the motor spirit is stored in the installation of the selling trader. It is further required that it must be established that refund was granted by the selling trader to the purchasing trader in respect of quantity of motor spirit lost on account of evaporation or leakage. The entire case of the petitioners is based on a wrong apprehension of the transaction. It may be noted that sales tax is chargeable only at one stage of the transaction of sal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch as the motor spirit still remains in the storage installed by the trader who sells it and the quantity of the motor spirit is reduced on account of evaporation or leakage at the stage of first sale which is liable to tax. So far as the petitioners are concerned, they purchase the motor spirit and make the payment of its price along with the sales tax and thereafter any further sale made by them is not liable to any tax and as such they cannot claim any refund of tax in respect of any quantity of motor spirit being lost on account of evaporation or leakage. There cannot be any dispute that the petitioners paid sales tax on a quantity of motor spirit actually purchased and delivered to them by the selling trader. The provisions of rule 15....