Declared goods and last-purchase levy: unsold stock at year-end is not automatically taxable without later events fixing the purchase as last.

Declared goods taxed at the point of last purchase in the State do not become taxable merely because they remain in stock at the end of the assessment year. The Court read section 4 of the Madras General Sales Tax Act with the Second Schedule and held that a purchase acquires the character of the last purchase only when later events show the stock has been sold, consumed, destroyed, or otherwise dealt with. This construction also aligned with section 15 of the Central Sales Tax Act, 1956, by preventing multiple-stage taxation of declared goods across successive assessment years. The assessee was therefore entitled to the deduction claimed, and the Revenue's contrary contention failed.

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Issues: Whether, for declared goods taxable at the point of last purchase in the State, stock remaining in hand at the close of the assessment year could be treated as last purchase without regard to subsequent events, and whether the deduction claimed by the assessee was therefore allowable.

Analysis: Section 4 of the Madras General Sales Tax Act had to be read with the Second Schedule, which fixed the levy on cotton at the point of last purchase in the State. The legal character of a purchase as the last purchase was not complete merely because the goods were in stock at the end of the assessment year. Until the stock was actually sold, consumed, destroyed, or otherwise dealt with in later events, it could not be said that the purchase had acquired the character of a last purchase inside the State. This construction was consistent with section 15 of the Central Sales Tax Act, 1956, because otherwise the State could levy tax on declared goods at more than one stage in successive assessment years. The competing view that subsequent events could not be considered was rejected.

Conclusion: The assessee was entitled to the deduction claimed in respect of the stock in hand, and the contention of the Revenue failed.

Ratio Decidendi: For declared goods subjected to single-point levy at the point of last purchase in the State, liability arises only when the purchase has in fact acquired the character of the last purchase, and stock remaining unsold at the close of the assessment year is not automatically taxable on that basis.

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