The judgment of the court was delivered by

MADON, J. - The question which has been referred to us in this reference under section 61(1) of the Bombay Sales Tax Act, 1959, is, "Whether, on the facts and in the circumstances of the case and on true and proper interpretation of rules 40 and 45 of the Bombay Sales Tax Rules, 1959, the Tribunal was correct in law in holding that the Ahmendabad branch of the respondent could not claim set-off under rule 40 in respect of the stock held at Ahmedabad as on 1st January, 1960, and sold there in in its own assessment proceedings but that the head office at Bombay alone was entitled in law to claim set-off in respect of taxes paid on its purchases of goods held in stock by its branch office at Ahmedabad ?"

In order to appreciate the facts which have given rise to this reference it is necessary first to know certain relevant provisions of the Bombay Sales Tax Act, 1959, and the Bombay Sales Tax Rules, 1959, framed thereunder. The said Act came into force on 1st January, 1960, which date is referred to in the said Act as "the appointed day". Under the said Act a dealer whose turnover of all sales or of all purchases in the particular year specified in section 3 exceeds the limit laid down in sub-section (4) of that section becomes liable to pay tax under the said Act. Under section 22 no dealer, while being liable to pay tax under the said Act, is to carry on business as a dealer unless he possesses a valid certificate of registration as provided by the said Act. Under section 77(1)(b) any registration certificate issued by or under any of the laws repealed by the said Act, which was in force immediately before 1st January, 1960, is on that date to be deemed, so far as the liability to tax under sub-section (1) of section 3 is concerned, to be a certificate of registration issued under the said Act. One of the Acts repealed by the said Act was the Bombay Sales Tax Act, 1953. Under rule 7(3) of the Bombay Sales Tax Rules, 1959, a dealer having places of business within the jurisdiction of different registering authorities is required to make an application for registration separately to each such authority in respect of his places of business (not being merely a warehouse) within the jurisdiction of that authority. The position under rule 3(3) of the Bombay Sales Tax (Registration, Licensing and Authorization) Rules, 1954, framed under the Bombay Sales Tax Act, 1953, was the same. In respect of his different places of business which have been registered separately as aforesaid, a dealer is required, under the Bombay Sales Tax Rules, 1959, to file separate returns unless under the proviso to sub-section (1) of section 32 of the Bombay Sales Tax Act, 1959, the Commissioner has given him permission to furnish a consolidated return relating to all or any of the places of business of the dealer in the State for a particular period or for such different periods to such authority as he may direct. As separate returns have to be filed in respect of each place of business situate within the jurisdiction of different Sales Tax Officers, the assessment in respect of such returns would be separate. Rule 40(1) of the Bombay Sales Tax Rules, 1959, as it was in operation at the material time, provided as follows :

"40. Drawback, set-off or refund of tax for goods in stock on the appointed day. - (1) Where a registered dealer (hereinafter referred to in this rule as 'the assessees') becomes liable to pay tax under the Act from the appointed day by reason of his turnover of sales or turnover of purchases having exceeded during the year ending on the 31st March, 1959, or before the appointed day during the year commencing on the 1st April, 1959, the relevant limits specified in sub-section (4) of section 3 and the assessee holds in stock on the appointed day goods described in Schedule C, D or E, which were purchased by him before the appointed day (hereinafter referred to in this rule as 'the said go