Purchase tax on exempt-sale goods remains payable unless the statute expressly exempts the purchase itself.

Section 4(1) of the Punjab General Sales Tax Act, 1948 was treated as the general charging provision for both sales and purchases, subject to express exemptions. Section 6 was held to exempt only the sale of Schedule B goods, including agricultural produce sold by the grower, and not their purchase. Section 4-B was construed as a provision for specified purchase-tax situations involving goods other than Schedule B goods, and did not displace the general levy or create an implied exemption. The definition of "purchase" in section 2(ff) was read broadly. Purchase tax was therefore payable on sugarcane purchased by sugar mills.

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Issues: Whether purchase tax was leviable on sugarcane purchased by the sugar mills from growers under the Punjab General Sales Tax Act, 1948, and whether section 4-B excluded Schedule B goods from purchase tax.

Analysis: Section 4(1) was treated as the charging provision levying tax both on sales and purchases, subject to sections 5 and 6. Section 6 exempted only the sale of goods in Schedule B, including agricultural produce sold by the grower himself, and did not exempt their purchase. Section 4-B was construed as a provision meant to identify and regulate purchase tax in specified situations involving goods other than those in Schedule B; it did not limit the general levy under section 4(1) or create an exemption for Schedule B goods. The definition of "purchase" in section 2(ff) was also held not to confine purchase tax only to Schedule C goods, because it extended to goods on the purchase whereof tax was payable under any provision of the Act. The exemption in section 4(1) for a dealer dealing exclusively in goods declared tax-free under section 6 was read as referring only to dealers selling such goods, not to a purchase-tax exemption.

Conclusion: Purchase tax was held payable on the purchase of sugarcane, and the challenge to the notice was rejected.

Ratio Decidendi: Where the statute exempts only the sale of specified goods, the purchase of those goods remains taxable under the general charging provision unless the Act expressly exempts the purchase.

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