Last purchase tax on raw hides and skins cannot be demanded on mere stock possession during provisional assessment.

Liability to tax on raw hides and skins under item 7(a) of the Second Schedule read with section 4 of the Tamil Nadu General Sales Tax Act, 1959 arises only when the goods have in fact become the last purchase in the State during the assessment year. Provisional assessment does not remove the requirement of material showing that the taxable event has occurred. Mere stock possession, unsold goods, or presumed market demand is insufficient where the goods may still change character before year-end. Demand notices based only on conjecture, without a determinative event establishing last purchase within the provisional period, were without authority and were quashed.

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Issues: Whether, in provisional assessment proceedings, tax could be demanded on raw hides and skins merely because the assessee held stocks during the assessment period, when the goods had not yet been shown to have acquired the character of the last purchase in the State.

Analysis: Liability to tax on raw hides and skins under item 7(a) of the Second Schedule read with section 4 of the Tamil Nadu General Sales Tax Act, 1959 arises only when the consignment has, in fact, become the last purchase in the State during the assessment year. Provisional assessment does not dispense with the need for material showing that the taxable event has occurred. If the goods remain unsold and unconverted during the assessment year, their character may still change before year-end, and a demand based only on possession or presumed market demand is not justified. The Court accepted that where there is no determinative event establishing last purchase within the provisional period, demand cannot be raised on conjecture.

Conclusion: The demand notices were without authority and were quashed.

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