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 yea