Declared goods and single-point levy rules prevent shifting tax to a later sale when the first sale is exempt.

Declared goods subject to a single-point levy cannot be taxed at a later sale if the first sale in the State is exempt. The text explains that iron and steel, being declared goods under the Central Sales Tax Act, were governed by the single-point restriction, while the State schedule fixed the tax point at the first sale. Because the first sale by the Tamil Nadu Electricity Board was exempt under the State notification, the statutory scheme did not permit the levy to be shifted to a subsequent purchaser's sale. The circular was therefore invalid to the extent it treated the exempt first sale as ineffective and attempted to impose tax at a later stage.

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Issues: Whether the impugned circular could validly treat the first exempt sale of declared goods as ineffective for the purpose of the single-point levy and thereby shift tax liability to a subsequent sale; and whether iron and steel purchased from the Tamil Nadu Electricity Board, being declared goods and sold under an exemption notification, were liable to tax at any later stage in the State.

Analysis: The goods in question were declared goods under section 14 of the Central Sales Tax Act, 1956 and were subject to the restrictions in section 15 of that Act, including the single-point limit on levy. Under the Tamil Nadu General Sales Tax Act, 1959, the tax point for iron and steel was fixed by the Second Schedule at the point of first sale in the State. The first sale in the State was the sale by the Tamil Nadu Electricity Board, and that sale was exempt under the notification issued under section 17(1) of the State Act. The circular proceeded on the basis that the exempt first sale could be ignored and that the first taxable sale would be the purchaser's sale, but the statutory scheme did not permit shifting the point of levy from the first sale to a later sale. Where the single point is fixed at the first sale and that sale is exempt, the goods cannot be subjected to tax at a subsequent sale either.

Conclusion: The circular was invalid insofar as it purported to shift the point of levy to a subsequent sale. The exempt first sale exhausted the State's power to levy tax on those goods at any later stage, and the contention of the revenue was rejected.

Ratio Decidendi: For declared goods subject to a single-point levy at the first sale in the State, if that first sale is exempt from tax, the State cannot shift the incidence of tax to a subsequent sale by treating the exempt sale as though it were nonexistent.

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