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TMI Blog1978 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... old and silver bars sold by the petitioners. Mr. Dasarathararna Reddi, the learned counsel appearing for the petitioners, raised two contentions: (1) that clause (ii) of section 6-A cannot be applied to the petitioners as the purchases of gold and silver jewellery were made by them from non-dealers, and (2) that the turnover under section 6-A cannot be taxed under section 5-A of the Act. To determine the two questions raised by the learned counsel, we may state the relevant facts. The petitioners are dealers in gold, silver and jewellery. These items are taxable at the first sale point as per entry 20 of the First Schedule to the Act. The petitioners purchase gold and silver ornaments from persons who are not dealers within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on such goods under section 5 or section 6." In the counter-affidavit filed on behalf of the respondents, it is stated that the test whether section 6-A(2) is applicable or not, is to see whether the transactions are taxable transactions. Even if the sales by persons to the petitioners are not taxable in the hands of the sellers as they are not dealers, since the goods are taxable goods, the petitioners are liable to pay the purchase tax under section 6-A(ii). Mr. Dasaratharama Reddi, the learned counsel for the petitioners, sought to point out that the omission of the words "in circumstances in which no tax is payable under section 5 or under section 6, as the case may be", in clause (ii) of section 6-A is very significant. It is hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n used in clause (i). The requirements to attract clause (ii) are stated in sub-clauses (a), (b) and (c). If a dealer consumes such goods in the manufacture of other goods for sale or otherwise, or disposes of such goods in any manner other than by way of sale in the State, or despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, such transactions, either sales or purchases, would attract the tax which would have been leviable on the goods sold or purchased under section 5 or section 6 of the Act. The learned counsel sought to rely upon the distinction in the phraseology used in section 7-A of the Madras General Sales Tax Act and section 5-A of the Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than by way of sale in the State or (c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. All the ingredients referred to by the learned Judges in that case are present in section 6-A of the Act. As has been adverted to above, the object of enacting section 6-A is to plug the loopholes in the other provisions relating to taxation and prevent evasion of tax. Therefore, in construing such a provision, a construction which would defeat the very object of the legislation should not be given. If more than one construction is possible, the construction which preserves its workability and efficacy has to be preferred to the one which would render it stale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in our opinion, alter the character or nature of the tax that is imposed under either of the sections. Section 5-A itself makes it clear that the additional tax is imposed only on every dealer who is liable to pay the tax under section 5. It is not disputed before us that under section 5, a dealer has to pay tax only on the sales or purchases in one year and it is the very same sales or purchases that are sought to be taxed with the additional rate under section 5-A........ In ascertaining the true nature and character of the additional tax under section 5-A it is legitimate as well as necessary that both the sections should be read together in order to ascertain the true character of the tax sought to be imposed. We are satisfied that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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