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TMI Blog1997 (2) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer, Durg are taken into consideration. The petitioner has prayed for declaration that conversion of whole pulses into split pulses did not amount to a process of manufacture. It is prayed that no purchase tax could be levied under section 7(2) of the Act of 1958 and that the rate of tax could at the most be 2.5 per cent on the purchases effected by the petitioner from unregistered dealers. 3.. The petitioner is carrying on the business of manufacture and sale of pulses and is registered as a dealer under the Act of 1958. The petitioner holds Registration Certificate No. DRG/2954. The assessment year involved in the present case is from November 1, 1978 to October 21, 1979. The petitioner was assessed to purchase tax under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee/petitioner has strenuously urged before us that section 15(d) of the Act of 1956 imposes a restriction on the competence of the State Legislature to levy the sales tax or purchase tax on the goods declared by the Parliament under section 14(vi-a) of the Act of 1956 and therefore the petitioner was not liable to pay purchase tax. 5.. In order to appreciate the contention of the learned counsel for the petitioner, we would like to refer to section 7 of the Act of 1958, which reads as under: "7. Levy of purchase tax.-(1) Every dealer who in the course of his business purchases any goods specified in Schedule II- (i) from a registered dealer in circumstances in which no tax under subsection (1) of section 6 is payable by that registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in respect of any year on (a) a dealer other than a dealer referred to in clause (d), not liable to pay tax under sub-section (1) of section 6 if the aggregate of purchase prices of all goods in that year does not exceed the limits specified in sub-section (5) of section 4; (b) a dealer holding a licence under section 13 in respect of raw materials and incidental goods used in that year in the manufacture of goods in respect of which he holds such licence; (c) a dealer in respect of the purchase price of paddy, unginned cotton as specified in Part I of Schedule II and such other goods in the said Part as the State Government may from time to time, by notification, specify who has consumed or used them as raw materials for the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er entry No. 54 of the Second List of Schedule VII. But article 286(3) of the Constitution says"Any law of a State shall, in so far as it imposes, or authorises the imposition of, (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify." In exercise of this power, the Parliament has specified certain goods under section 14 of the Act of 1956 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ishwari Khetan Sugar Mills (P.) Ltd. v. State of U.P (1980) 4 SCC 136; AIR 1980 SC 1955 to which we shall presently refer." The power of State Legislature is circumscribed by sections 14 and 15 of the Central Sales Tax Act, 1956. 8.. Now the question before us is whether under section 7(2) of the Act of 1958, goods can be subjected to the purchase tax or not. Section 7(2) of the Act of 1958 says that every dealer who in the course of his business purchases any goods specified in Schedule II from a registered dealer in circumstances in which no tax under sub-section (1) of section 6 is payable by that registered dealer on the sale price of such goods, or from any other person, shall be liable to pay tax on the purchase price of such g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State or in the course of inter-State trade or commerce but sold or disposed of otherwise or used or consumed in the manufacture or processing of other goods or used or consumed otherwise. What it conveys is that such a purchasing dealer will have to pay tax if the goods are not sold or disposed of or, it has been used in the manufacturing process or consumed therein. But nonetheless, he will have to pay tax at one point of time. As far as pulses are concerned, position cannot be said to be the same. So far as processing is concerned, even if pulses are split, technically it may amount to manufacture but looking to the provision of section 15(d) of the Act of 1956, they will be treated one item and cannot be subjected to purchase t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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