Fresh taxing notification created a new incidence of tax on cotton yarn sale, despite earlier tax at another stage.

A new taxing notification shifting the taxable point for cotton yarn to sale by a dealer to the consumer created a fresh incidence of tax under section 3-AA from 1 August 1958. Because that charging point was distinct from section 3-A, yarn held in stock on that date was not exempt merely because it had already suffered tax in the hands of the importer or manufacturer. The subsequent sale to the consumer remained taxable under Notification No. 2934/X-902, and the turnover in dispute was therefore liable to tax in favour of the Revenue.

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Issues: Whether the turnover of yarn held in stock on 1 August 1958 became taxable under Notification No. 2934/X-902 dated 1 August 1958, notwithstanding that the goods had already suffered tax at the hands of the importer or manufacturer before the notification.

Analysis: The notification shifted the taxable point for cotton yarn to sale by a dealer to the consumer with effect from 1 August 1958. A fresh charge was created under section 3-AA, and the taxable point under that provision was distinct from section 3-A. The fact that the assessee held the stock before the notification, or that the goods had earlier suffered tax in the hands of the importer or manufacturer, did not prevent the levy from operating on the subsequent sale to the consumer.

Conclusion: The turnover of yarn in dispute was taxable under Notification No. 2934/X-902 dated 1 August 1958, in favour of the Revenue and against the assessee.

Final Conclusion: The reference was answered in the affirmative, and the turnover of yarn was held liable to tax under the notification with no order as to costs.

Ratio Decidendi: Where a new taxing notification and corresponding charging provision create a fresh incidence of tax at a different point of sale, prior holding of stock or earlier taxation at another stage does not exempt the subsequent taxable sale.

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