Section 7-A liability under Tamil Nadu sales tax law turns on deemed local sale and post-purchase dispatch conditions.

Section 7-A of the Tamil Nadu General Sales Tax Act, 1959 was analysed in relation to purchases of senna leaves later exported outside the State. The provision was read as triggering liability where goods are purchased without tax being payable under sections 3, 4 or 5 and are then consumed, otherwise disposed of, or despatched outside the State; no additional requirement of a separately taxable sale in the State was read into the text. The definition of "sale" in section 2(n), read with Explanation (3)(a), was treated as deeming a sale to take place in the State when the goods are within the State at the relevant time. On the stated facts, the goods were within the State when the transaction was made or appropriated, but section 7-A was held not attracted to the purchase turnover.

---

---

Issues: Whether section 7-A of the Tamil Nadu General Sales Tax Act, 1959 applied to purchases of senna leaves exported outside the State, and whether the expression "sale in the State" in section 7-A(1)(b) required a local taxable sale.

Analysis: Section 7-A fastens liability when goods are purchased in circumstances in which no tax is payable under sections 3, 4 or 5 and the goods are thereafter consumed, otherwise disposed of, or despatched outside the State. The provision does not say that the sale in the State must be a taxable sale, and no qualifying word can be read into the text. The definition of "sale" in section 2(n), read with Explanation (3)(a), deems a sale to take place in the State if the goods are within the State at the relevant time, whether the contract concerns specific goods or unascertained goods. On the facts, the goods were within the State when the export transaction was made or appropriated, so the transaction was a local sale for the purposes of the Act.

Conclusion: Section 7-A was not attracted to the purchase turnover in question, and the assessee was not liable to tax on that item.

---