STATE OF MADRAS vs M/S. SWASTIK TOBACCO FACTORY, VEDARANYAM

The Supreme Court addressed the interpretation of Rule 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, concerning the deductibility of excise duty on raw tobacco from the turnover of chewing tobacco. The Court held that since the excise duty was paid on raw tobacco, which is a different commodity from the manufactured chewing tobacco, it could not be deducted from the turnover. The ruling emphasized that the expression 'in respect of the goods' in the rule refers only to the goods sold and does not include the raw materials used in their manufacture.