Anti-evasion purchase tax under sales tax law applies to goods bought from non-dealers and consumed in manufacture.

Section 6-A(ii) of the Andhra Pradesh General Sales Tax Act was treated as an anti-evasion provision covering purchases of taxable goods from non-registered dealers where the goods were consumed in manufacture, otherwise disposed of, or despatched outside the State; on the facts stated, the purchase turnover fell within that provision. The text also states that turnover already liable under section 6-A could still attract the additional levy under section 5-A, because the levy under sections 5 and 5-A was treated as part of the same tax scheme and did not change the character of the charge. The challenge to the purchase tax provisions therefore failed.

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Issues: (i) Whether section 6-A(ii) of the Andhra Pradesh General Sales Tax Act applied to purchases of taxable goods made from non-dealers and consumed in the manufacture of other goods for sale or otherwise. (ii) Whether the turnover liable under section 6-A could be taxed under section 5-A of the Act.

Issue (i): Whether section 6-A(ii) of the Andhra Pradesh General Sales Tax Act applied to purchases of taxable goods made from non-dealers and consumed in the manufacture of other goods for sale or otherwise.

Analysis: Section 6-A was enacted to prevent evasion of tax and had to be read as an integrated scheme. Clause (ii) was intended to cover purchases from persons other than registered dealers, and the omission of words appearing in clause (i) did not narrow its scope. The provision applied where a dealer purchased taxable goods from a non-registered dealer and either consumed them in manufacture, otherwise disposed of them, or despatched them outside the State. The ingredients of the provision were held to be satisfied on the facts.

Conclusion: The provision applied against the petitioners, and the purchase turnover was liable to tax under section 6-A(ii) of the Act.

Issue (ii): Whether the turnover liable under section 6-A could be taxed under section 5-A of the Act.

Analysis: Section 5-A was read together with the charging provisions to determine the true character of the levy. The additional levy under section 5-A did not alter the nature of the tax, and the same turnover could attract the statutory incidence contemplated by the Act. The court accepted the view that the levy under section 5 and the additional levy under section 5-A partook of the same character.

Conclusion: The turnover in question was held liable to tax under section 5-A of the Act.

Final Conclusion: The writ petition was rejected, and the challenge to application of the purchase tax provisions failed in full.

Ratio Decidendi: A taxing provision enacted to prevent evasion must be construed as a whole so as to preserve its efficacy, and an additional levy linked to the basic tax scheme is taxable where the statutory ingredients are satisfied.

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