Purchase tax on cotton depends on the applicable schedule entry at the time of purchase; later expansion was not retrospective.

The amended definition of "dealer" under the Haryana General Sales Tax Act, 1973 operated retrospectively, so the assessee could be treated as a dealer even though the cotton was bought for export outside Haryana. Purchase tax liability, however, depended on the charging scheme in section 5(1) read with Schedule D of the Punjab General Sales Tax Act, 1948. At the relevant time, the cotton entry authorised levy only on the first purchase by a dealer liable to tax, and the later substitution of "last" for "first" did not apply. On the facts, the assessee was not the first purchaser because the goods were bought from commission agents, so the statutory condition for levy was not met.

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Issues: Whether the assessee was liable to purchase tax on unginned cotton purchased in Haryana and subsequently sent the State, and whether the levy could stand when the relevant entry in Schedule D made tax exigible only on the first purchase by a dealer liable to tax.

Analysis: The amended definition of "dealer" under the Haryana General Sales Tax Act, 1973, operated retrospectively from 7 September 1955, so the assessee could be treated as a dealer even though the cotton was purchased for export outside the State. The liability to purchase tax, however, depended not merely on dealer status but on the charging scheme in section 5(1) read with Schedule D of the Punjab General Sales Tax Act, 1948. At the material time, the entry relating to cotton authorised levy only on the first purchase within Haryana by a dealer liable to tax. The later amendment substituting "last" for "first" was not applicable to the purchases in question. On the facts found, the assessee was not the first purchaser; the purchases were from commission agents, and the statutory condition for levy was therefore not satisfied.

Conclusion: The assessee was treated as a dealer, but the purchase tax levy on these cotton purchases was not sustainable because the assessee was not the first purchaser within the meaning of the relevant unamended entry.

Final Conclusion: The reference was answered by upholding dealer status but denying purchase-tax liability on the facts and the law applicable at the material time.

Ratio Decidendi: Liability to purchase tax must be determined by the applicable charging provision and entry in the schedule as it stood on the date of purchase; a later amendment enlarging the levy cannot be applied retrospectively unless the statute clearly so provides.

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