Appeal dismissed, upholding tax decision on unsold goods under Mysore Sales Tax Act.

The appeal was dismissed, upholding the Commissioner's decision to tax the turnover under Section 5(4) of the Mysore Sales Tax Act, 1957. The purchases of declared goods remaining unsold were deemed taxable as the last purchases in the State and sold to an unregistered dealer. The Court affirmed the Commissioner's power to examine subsequent records and rejected the appellant's arguments. The appellant was directed to pay costs, including an advocate's fee of Rs. 100.

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Issues Involved:
1. Taxability of purchases of declared goods remaining unsold under Section 5(4) of the Mysore Sales Tax Act, 1957.
2. Scope of the Commissioner of Commercial Taxes' powers under Section 21(2) of the Act to examine records of subsequent years.
3. Tax liability of purchases of declared goods sold outside the State on consignment basis under Section 5(4) of the Act.

Detailed Analysis:

1. Taxability of Purchases of Declared Goods Remaining Unsold:
The appellant contended that purchases of declared goods remaining unsold are not liable to be taxed under Section 5(4) as it stood at the relevant time. The Commissioner of Commercial Taxes, relying on the decision in Hormusji Hirjibhoy and Co. v. Commercial Tax Officer, Circle II, Hubli, concluded that such purchases are taxable. However, the appellant argued that the authority of this decision was weakened by the Full Bench decision in The State of Mysore v. Gujjadi Narayan Nayak and Another. Despite this, the Court held that the turnover in question should be taxed based on the language of Section 5(4) of the Act. The Commissioner found that the goods were sold to a dealer not registered under the Act, making the purchases the last purchases in the State, thus taxable.

2. Scope of the Commissioner's Powers Under Section 21(2):
The appellant argued that the Commissioner could not examine records of subsequent years while revising the assessment order. The Court examined precedents, including decisions from the Madras High Court, which clarified that the revising authority could inspect all records that the assessing authority was required to examine. The Court concluded that it was the duty of the assessing authority to determine whether the unsold stock was subsequently sold to ascertain if the purchases were the last purchases. The Commissioner acted within his powers under Section 21(2) by investigating the facts that the assessing authority failed to determine. Even if the Commissioner could not directly examine subsequent records, he could have reopened the assessment and directed the assessing authority to verify the facts.

3. Tax Liability of Purchases Sold Outside the State on Consignment Basis:
The appellant contended that purchases of declared goods sold outside the State on consignment basis are not taxable under Section 5(4). The Court disagreed, noting that Section 5(4) does not differentiate between sales on consignment basis and other sales. The appellant did not argue that the purchases were intended for inter-State trade or commerce or that the goods were sold in the course of such trade. Therefore, the purchases were deemed taxable. The Court also dismissed the appellant's argument that the Commissioner incorrectly stated that the Commercial Tax Officer erred in not taxing the turnover because the cotton was sold outside the State on consignment basis in the subsequent year, clarifying that this was an inference drawn by the Commissioner.

Conclusion:
The appeal was dismissed, affirming the Commissioner's decision to tax the turnover of Rs. 20,93,265 under Section 5(4) of the Mysore Sales Tax Act, 1957, as the purchases were last purchases in the State and sold to a dealer not registered under the Act. The Court upheld the Commissioner's authority to examine subsequent records and found no merit in the appellant's contentions. The appellant was ordered to pay costs, including an advocate's fee of Rs. 100.

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