First-stage sales tax exemption turns on purposive reading of dealer certification for later sales of notified goods.

Under section 5(1-A) of the Punjab General Sales Tax Act, 1948, the notification-based levy on specified goods was confined to the first stage of sale. The proviso referring to a "registered dealer" was construed purposively to ensure that tax was secured on the first taxable sale, not to require every intermediary seller in the chain to be registered. Subsequent certificates were treated as linking the later sale to the original taxable transaction. On that construction, a later sale of vegetable ghee remained exempt where the goods had already borne first-stage liability, and the proviso could not be used to impose successive taxation because an intervening purchaser was unregistered.

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Issues: Whether, under section 5(1-A) of the Punjab General Sales Tax Act, 1948, the words "registered dealer" in the proviso to the notification-based first-stage levy required that every intermediary seller be a registered dealer, so as to deny exemption to the assessee on a subsequent sale of vegetable ghee.

Analysis: The levy under section 5(1-A) read with the notification was intended to tax the notified goods only at the first stage of sale. The proviso was construed in light of that object, namely, to ensure that tax was paid or undertaken to be paid at the first sale and not to require that all later hands through which the goods passed must be registered dealers. The expression "registered dealer" was read as referring to the dealer who made the sale at the first stage, and the subsequent certificates were treated as only linking the later sale with the original taxable sale. A construction making the goods taxable at successive stages merely because an intervening purchaser was unregistered was held to defeat the legislative policy.

Conclusion: The assessee was entitled to exemption on the subsequent sale, since the goods had already borne the first-stage liability and the proviso did not require every intermediary seller to be a registered dealer.

Ratio Decidendi: Where a taxing provision limits levy of notified goods to the first stage of sale, the proviso concerning certification must be construed purposively so that the tax is secured at the first sale, and not so as to impose tax again merely because an intervening purchaser is unregistered.

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