Last purchase tax on cotton purchases applied despite consignment sales; revisional power extended to necessary assessment material.

Cotton purchases were held liable to tax as last purchases under section 5(4) of the Mysore Sales Tax Act, because the taxable event was the purchase itself and not the later sale of the goods outside the State. Sales on consignment basis were treated as irrelevant to that liability, since the provision applied to sales to unregistered dealers without distinguishing between inside-State and outside-State dealings. The revisional authority under section 21(2) was also said to have power to examine material necessary to determine whether the assessing authority had correctly identified the unsold stock as last purchases. The tax revision was sustained and the assessee remained liable on the disputed turnover.

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Issues: (i) Whether the turnover relating to cotton purchased during the accounting period, but not sold within that period, was exigible to tax as last purchases under section 5(4) of the Mysore Sales Tax Act, 1957, and whether sales on consignment basis outside the State affected such liability; (ii) Whether the revisional authority, while acting under section 21(2) of the Mysore Sales Tax Act, 1957, could examine material beyond the assessment order and connected record to determine the correct taxability of the purchases.

Issue (i): Whether the turnover relating to cotton purchased during the accounting period, but not sold within that period, was exigible to tax as last purchases under section 5(4) of the Mysore Sales Tax Act, 1957, and whether sales on consignment basis outside the State affected such liability.

Analysis: The purchases, not the subsequent sale of the goods outside the State, constituted the taxable event. The expression relating to sale to a dealer not registered under the Act was construed on its plain meaning and was held to include dealers whether inside or outside the State, so long as they were unregistered. The section made no distinction between sales on consignment basis and other sales. Since the goods were declared goods and the purchases were the last purchases in the State, the turnover was liable to tax.

Conclusion: The turnover was exigible to tax and the contention of the assessee failed.

Issue (ii): Whether the revisional authority, while acting under section 21(2) of the Mysore Sales Tax Act, 1957, could examine material beyond the assessment order and connected record to determine the correct taxability of the purchases.

Analysis: The revisional power extended to the assessment record and the material the assessing authority ought to have examined. Where the assessing authority failed to ascertain whether the unsold stock had been subsequently sold so as to determine whether the purchases were last purchases, the revisional authority could undertake that enquiry. The revisional order was therefore not invalid merely because the Commissioner looked into material necessary to reach the correct factual conclusion.

Conclusion: The revisional authority acted within jurisdiction and the challenge on that ground failed.

Final Conclusion: The appeal was without merit, the tax revision was sustained, and the assessee remained liable on the disputed purchase turnover.

Ratio Decidendi: Under section 5(4), the taxable event was the last purchase in the State, and under section 21(2) the revisional authority could examine all material necessary to ascertain whether the assessment had correctly applied that charge.

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