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TMI Blog1992 (12) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ation from them?" In our opinion the question as framed does not bring out the controversy in the correct perspective. We would, therefore, reframe the question as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that medicines sold to the registered dealers which were manufactured, were liable to tax in terms of the notification of the Chief Commissioner dated 30th December, 1964?" Briefly stated, the facts as found by the Tribunal, are that the dealer is engaged in the business of resale of drugs and medicines and is registered under the provisions of the local Sales Tax Act. In respect of the assessment year 1973-74 the dealer had made sales of drugs and medicines and chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icines were sold by the importer. Therefore, the sales made by the dealer even to the manufacturers were held to be liable to tax. It is thereupon that the aforesaid question of law has been referred to this Court. The contention on behalf of the dealer is that on a correct interpretation of section 5A the benefit which is available with regard to the sale of medicines and drugs to a manufacturer against the purchaser's registration certificate cannot be denied to the dealer. Learned counsel for the dealer drew our attention to section 5A which is as follows: "Notwithstanding anything to the contrary in this Act, the Chief Commissioner may, by notification in the Official Gazette, specify the point in the series of sales by successive d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le by a dealer like the present taxable irrespective of the provision of section 5(2) of the Act. In view of the use of the words "notwithstanding anything to the contrary in this Act..." the benefit of deductions under section 5(2)(a)(ii), it is submitted, will not be available to the dealer even in case of sales made to a registered dealer because the notification issued under section 5A makes the first sale in Delhi taxable. Before dealing with the notification dated 30th December, 1964, it is necessary to examine the full import and effect of section 5A of the Act. Section 5A appears to have been enacted to specify a point when sales can be taxed. If a number of sales had taken place in Delhi of a particular item then it may have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be applicable. There has to be plurality of sales of a commodity in order to attract the provisions of section 3A of the U.P. Sales Tax Act, it was held. We are in respectful agreement with the said decisions. In our opinion the same principle will apply in Delhi also. Unless and until there is plurality of sales of a commodity the provisions of section 5A will not apply. Narrowly construing the impugned Notification dated 30th December, 1964, may give the impression that even if there is no plurality of sales in Delhi then whenever a sale takes place by an importer or by a manufacturer, the same is subject to tax. Section 5A contemplates the issuance of a notification only when there is plurality of sales. We cannot assume or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a case of series of sales by successive dealers in Delhi and by virtue of the notification tax would be levied on the first sale. The Tribunal has proceeded on the basis that the dealer has made sales to manufacturers on the strength of their registration certificates. The goods which were sold by the dealer have been used in manufacture by the purchasers. These goods have, therefore, not been subjected to resale as such. There has been no series of sales of these goods in the Union Territory of Delhi, in view of the fact that the goods sold by the dealer had lost their character when they were used as raw material, in the manufacture of medicines by the purchasers. It is that manufactured item which is ultimately sold by the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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