STATE OF PUNJAB & ORS. ETC. ETC. vs M/S PERFECT SYNTHETICS ETC. ETC.

The Supreme Court ruled that under Rule 29(xii) of the Punjab General Sales Tax Rules, 1949, an assessee is entitled to deduct the purchase value of raw materials bought from exempted units when calculating taxable turnover. The Court clarified that the deduction is applicable even if the raw materials were not subjected to tax at the first stage of sale, as per Section 5(1-A) of the Punjab General Sales Tax Act, 1948. The judgment of the Punjab and Haryana High Court was upheld, confirming the assessee's entitlement to the deduction.