2004 (12) TMI 652

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....s Tax Rules, 1970, on the purchase of dry-ice made by the opponent?" 2.. The respondent-assessee, who is carrying on business of manufacturing ice-cream, claimed set-off under rule 42 of the Gujarat Sales Tax Rules, 1970 ("the Rules") in respect of the tax paid on dryice contending that the same was an item of consumable stores. The sales Tax Officer, while assessing the respondent-assessees for Samvat Years 2034, 2035, 2036 and 2037, disallowed the set-off, holding that dry-ice was employed to facilitate transportation of manufactured goods and did not form an item of consumable stores. The assessee failed in the first appeal before the Assistant Commissioner. The matter was carried in second appeal before the Tribunal. The Tribunal, re....

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.... being granted set-off is that the goods manufactured by an assessee utilise other goods, on which tax has been paid, as raw materials or processing materials or as consumable stores in the manufacture of taxable goods. 4.1. The same phrase came up for consideration before this Court in the case of Vasuki Carborundum Works v. State of Gujarat [1979] 43 STC 294. The assessee therein, involved in manufacturing crockery, purchased kathi (twine), which was used for the purpose of packing the manufactured goods. The stand of the Revenue was that kathi was neither raw material, nor processing material, nor consumable stores, required for the manufacture of crockery. This Court, applying the apex Court decision in case of J.K. Cotton Spinning W....

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....th the manufacturing activity and without which the activity of manufacture may be commercially inexpedient? The answer, in our opinion, is that the article in question in this reference, namely, kathi (twine), is part of such consumable stores which would be necessarily required in the activity of marketing the goods which is essentially connected with the larger activity of manufacture. We do not want to say that all the articles or materials which may facilitate the business of manufacture would be such consumable goods as entitled to be purchased tax-free. The ornamental packing of an article for tying carton or boxes in which the manufactured goods are packed so as to make them attractive in the market cannot ex facie claim such exempt....