Declared goods tax liability turns on the assessment year, and a later sale does not erase purchase tax already attached.

Declared goods such as groundnuts remained subject to the constitutional and statutory restriction that sales tax could be levied at no more than one stage and within the prescribed rate. On the construction of section 5(4) of the Mysore Sales Tax Act, read with section 2(x), the relevant point of time was the assessment year, so the last purchase within that year attracted liability even if part of the goods was sold only after the year closed. A later sale did not undo a tax liability that had already attached during the assessment year. The purchase turnover was therefore treated as taxable.

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Issues: Whether sales tax on groundnuts, being declared goods, could be levied on the petitioner as the last purchaser in the assessment year even though part of the goods was sold only after the assessment year and whether such levy offended the statutory restrictions on taxation of declared goods.

Analysis: The restriction under Article 286(3) of the Constitution and section 15 of the Central Sales Tax Act, 1956 limited the levy on declared goods to not more than one stage and within the prescribed rate. The assessment did not violate that restriction because no tax was shown to have been levied at more than one stage. On the proper construction of section 5(4) of the Mysore Sales Tax Act, 1957, read with section 2(x), the relevant point of time was the assessment year, and the last purchase within that year attracted the levy. A later sale after the close of the assessment year did not erase liability already attached during the assessment year. The words of the provision were read as referring to the last purchase included in the turnover of purchases in each year relating to such goods.

Conclusion: The assessment on the petitioner's purchase turnover was valid, and the contention that the turnover of Rs. 1,60,706-38 nP. was outside the taxable turnover failed.

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