Purchase tax applies to goods consumed in construction business; notice period defect was not fatal absent prejudice.

A notice period prescribed in Form XVI was treated as directory, not mandatory; the absence of the full 15 days did not invalidate the assessment where no prejudice was shown and the assessees could still explain their case. Building materials bought in the course of a construction business were held taxable on purchase price because a dealer includes a person carrying on the business of buying goods, and section 7 covers taxable goods consumed otherwise than by sale, including use outside manufacture for sale. The notices, assessments, and purchase tax liability were upheld against the assessee.

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Issues: (i) Whether the assessment notices were invalid because they did not allow the full period prescribed by the rules; (ii) Whether the appellants were dealers liable to purchase tax on building materials consumed in their construction business under section 7.

Issue (i): Whether the assessment notices were invalid because they did not allow the full period prescribed by the rules.

Analysis: The rule prescribing Form XVI and a period of not less than 15 days was held to be directory rather than mandatory. The absence of the full period did not by itself invalidate the proceedings, especially when no prejudice to the assessees was shown and they were not prevented from submitting their explanation.

Conclusion: The notices and assessments were valid; this issue was answered against the assessee.

Issue (ii): Whether the appellants were dealers liable to purchase tax on building materials consumed in their construction business under section 7.

Analysis: A dealer under the Act includes a person carrying on the business of buying goods, and sale of the very article bought is not a necessary condition. Goods purchased in the course of business and consumed otherwise than in the manufacture of goods for sale remain within section 7, which expressly covers consumption of taxable goods otherwise and disposal otherwise than by sale. Building materials bought for use in the construction business were therefore taxable on their purchase price.

Conclusion: The appellants were dealers and were liable to purchase tax on the goods purchased for use in their business; this issue was answered against the assessee.

Final Conclusion: The appeals failed on both questions of law, and the liability to tax and penalty was upheld.

Ratio Decidendi: Where a dealer purchases taxable goods in the course of business and consumes them otherwise than by sale, the purchase price is liable to tax under the purchase tax provision even if the goods are not used in manufacturing goods for sale.

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