The judgment of the Court was delivered by

S. D. SHAH, J. - By this reference made at the instance of the applicant under section 69(1) of the Gujarat Sales Tax Act, 1969, the Gujarat Sales Tax Tribunal has referred the following question of law for our decision :

"Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in not allowing the applicant to raise the plea of set-off under rule 42 of the Gujarat Sales Tax Rules, 1970, in respect of the amount of tax which it had paid on the purchase of the relevant raw and processing materials and consumable stores which it was found to have used in the manufacture of paper as taxable goods for sale and which it has sold locally or in the course of inter-State trade and commerce."

2. The facts giving rise to the present reference, shortly stated, are as under :

(i) The applicant is a limited company carrying on its business of manufacturing and selling of paper. It is a registered dealer under the provisions of the Gujarat Sales Tax Act, 1969. It held recognition certificate under section 32 of the said Act which enabled it to purchase raw and processing materials and consumable stores for use