Exemption for gold and silver articles did not extend to bullion used in manufacture, denying purchase tax relief.

Section 8-A of the Karnataka Sales Tax Act was held inapplicable to purchases of gold and silver articles used to manufacture bullion, because the exemption covered only articles of gold and silver used to make other articles of gold and silver on which sales tax was payable. The expression "articles of gold and silver" was construed as excluding bullion or specie, as those terms refer to goods capable of use as jewellery or utensils. The dealer could not claim exemption merely because no sales tax arose on sale of bullion; the statutory condition required manufacture and sale of qualifying articles from the purchased goods. The assessee was therefore not entitled to exemption from purchase tax.

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Issues: Whether the exemption notification under section 8-A of the Karnataka Sales Tax Act, 1957 applied to purchases of gold and silver articles used to manufacture bullion, so as to exempt the dealer from purchase tax under section 6.

Analysis: The notification exempted purchase tax only where a manufacturer purchased articles of gold and silver and used them in manufacturing articles of gold and silver on which the corresponding sales tax was payable. The expression "articles of gold and silver" was held not to include bullion or specie, since the term denoted goods capable of use as jewellery or utensils. The Court further held that the exemption could not be claimed merely because no sales tax was payable on the sale of bullion, as the condition precedent was the manufacture and sale of articles of gold and silver from the purchased articles.

Conclusion: The notification did not apply to bullion, and the assessee was not entitled to exemption from purchase tax.

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