Purchase tax applies to taxable goods bought from agriculturists when statutory conditions under the Karnataka Sales Tax Act are met.

Section 6 of the Karnataka Sales Tax Act, 1957 operates as a purchase tax provision on taxable goods that have not suffered tax at the sale stage. The term "taxable goods" refers to goods liable to tax under the Act, not merely goods sold by a dealer. A dealer who buys such goods from agriculturist-producers and despatches them outside the State remains liable if the statutory conditions for levy are otherwise satisfied. The exclusion of an agriculturist from the definition of "dealer" does not prevent the levy. The construction in M.K. Kandaswami was applied, and the earlier view in Guddad & Sons was rejected.

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Issues: Whether a dealer who purchases taxable goods from agriculturist-producers and despatches them outside the State otherwise than as a direct result of a sale or purchase in the course of inter-State trade or commerce is liable to purchase tax under section 6 of the Karnataka Sales Tax Act, 1957.

Analysis: Section 6 is a charging provision intended to tax purchases of goods which, though generally liable to tax, have not suffered tax at the sale stage because of the circumstances of the transaction. The expression "taxable goods" refers to goods of the kind liable to tax under the Act, not merely to goods sold by a dealer. The exclusion of an agriculturist from the definition of "dealer" does not prevent section 6 from operating where the buyer is a dealer and the statutory conditions are otherwise satisfied. The Court applied the construction approved by the Supreme Court in M.K. Kandaswami and held that the earlier view in Guddad & Sons did not correctly state the law.

Conclusion: The dealer is liable to pay purchase tax under section 6 of the Karnataka Sales Tax Act, 1957.

Ratio Decidendi: A purchase tax provision that taxes purchases of taxable goods upon their non-taxation at the sale stage applies even where the seller is not a dealer, provided the purchaser is a dealer and the statutory conditions for the levy are fulfilled.

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