Purchase tax exemption requires sale of identical goods, not a commercially different product made from them.

Section 10(a) of the Bombay Sales Tax Act, 1953 was construed to levy purchase tax on goods bought from an unregistered dealer unless the same goods were later sold. Although butter and ghee were both milk products within Schedule B, the conversion of butter into ghee created a commercially different commodity. The proviso therefore did not apply because the sale was not of the identical goods originally purchased. Purchase tax was accordingly leviable on the butter purchased from the unregistered dealer and sold after conversion into ghee.

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Issues: Whether purchase tax was leviable under section 10(a) of the Bombay Sales Tax Act, 1953 when butter purchased from an unregistered dealer was sold after being converted into ghee.

Analysis: Section 10(a) imposed purchase tax on purchases of goods specified in Schedule B from unregistered dealers, but the proviso exempted tax only where the very goods so purchased were subsequently sold. Butter and ghee were both milk products within entry 17 of Schedule B, but the statutory exemption depended on identity between the goods purchased and the goods sold. The conversion of butter into ghee resulted in a different commercial commodity, and the sale of ghee could not be treated as a sale of the butter originally purchased. The proviso therefore did not apply.

Conclusion: Purchase tax was leviable on the butter purchased from the unregistered dealer and sold after conversion into ghee. The answer was against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered by holding that the exemption proviso applied only when the same goods purchased from an unregistered dealer were sold, and not when they were converted into a different before sale.

Ratio Decidendi: The proviso to section 10(a) exempts purchase tax only when the dealer sells the identical goods purchased from the unregistered dealer; sale of a commercially different product made from those goods does not attract the exemption.

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