Purchase tax applies only to goods bought in the same commodity business, not for unrelated consumption or use.

Rule 5(2) of the Hyderabad General Sales Tax Rules, 1950 was construed as applying only where the assessee carried on business in the very commodity purchased. A dealer's status in another line of business was insufficient, and the term "business" in section 2(e) was given a commercial sense tied to dealings in that commodity itself. Goods bought merely for consumption or use in an unrelated activity did not form taxable turnover under the rule. On that basis, tanning bark purchased for use in tanning hides and skins was held outside rule 5(2) and the purchase turnover was not liable to sales tax.

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Issues: Whether tanning bark purchased by the assessee for use in the tanning process fell within rule 5(2) of the Hyderabad General Sales Tax Rules, 1950 and was liable to purchase tax as turnover of a dealer under section 2(e) of the Hyderabad General Sales Tax Act, 1950.

Analysis: Rule 5(2) was held to apply only where the assessee was carrying on business in the particular category of goods covered by that rule. Mere status as a dealer in some other line of business was insufficient. The expression "business" in the definition of dealer was treated as having a commercial sense, and purchase of goods for consumption or for use unconnected with business in that commodity did not attract the rule. The taxable turnover contemplated by the rule was confined to goods bought in the course of business in those goods themselves.

Conclusion: The tanning bark purchased for use in tanning hides and skins did not fall within rule 5(2), and the purchase turnover was not liable to sales tax.

Ratio Decidendi: For the purposes of rule 5(2), liability arises only when the assessee is engaged in business in the very commodity purchased, and not where the goods are bought merely for consumption or use in an unrelated business activity.

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