1990 (1) TMI 286 - HC - VAT and Sales Tax

Summary

Issues:
1. Taxability of purchases of gingerly oil-seeds from shandy dealers and agriculturists under section 7-A of the Tamil Nadu General Sales Tax Act.
2. Liability of the petitioner to pay sales tax on purchases from unregistered dealers.
3. Correctness of details provided by the petitioner regarding purchases from shandy dealers.

Analysis:
The High Court of Madras heard a tax revision case concerning the assessment year 1977-78, where the petitioner, a dealer in oil and oil-cakes, contested the taxability of purchases of gingerly oil-seeds under section 7-A of the Act. The petitioner argued that purchases from shandy dealers (unregistered dealers) should not be taxed at their hands, citing section 4 of the Act which mandates tax liability for declared goods. The assessing officer, Appellate Assistant Commissioner, and Tribunal had previously rejected this contention. The court agreed with the petitioner, stating that tax is attracted on the first sale of gingerly oil-seeds, making sales by unregistered dealers taxable only at the seller's hands, not the purchaser's.

Regarding purchases from agriculturists, the court confirmed the applicability of section 7-A of the Act. The Revenue was directed to verify the accuracy of details provided by the petitioner on purchases from shandy dealers. If discrepancies are found, the petitioner would be liable to pay tax under section 7-A. The court decided to remand the case for verification of purchase details from shandy dealers, emphasizing the petitioner's responsibility to prove purchases from unregistered dealers to receive relief from tax liability.

In conclusion, the court held that the turnover from purchases of gingerly oil-seeds from agriculturists is taxable under section 7-A, while the matter of purchases from shandy dealers was remitted to the assessing officer for verification. The petitioner was instructed to establish the purchases from unregistered shandy dealers to potentially receive relief from tax liability. The tax case was partly allowed and remitted accordingly, with no order as to costs.