Single-point sales tax on second-hand bottles cannot be imposed again where earlier taxable sale is inferred from their nature.

Second-hand empty bottles were treated as goods subject to single-point taxation at the first or earliest sale under the Karnataka sales tax scheme. Because the bottles were admitted to be second-hand, the earlier taxable sale could be inferred from their nature, and Rule 26(9)(a) did not create a presumption against the assessee merely because the immediate seller was unregistered. The turnover could not be taxed again as a first sale, so the assessment and appellate orders were set aside and refund of tax collected, if any, was directed.

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Issues: Whether the turnover of second-hand empty bottles was liable to sales tax as a first sale, and whether the assessee had failed to prove that the sale was a second sale.

Analysis: Item 109 of the Second Schedule to the Karnataka Sales Tax Act and Section 5(3) provide for levy at the first or earliest point of sale of the goods specified therein. Rule 26(9)(a) of the Karnataka Sales Tax Rules, 1957 requires a declaration when exemption is claimed on the footing that the dealer is not the first seller. The fact that the goods were admitted to be second-hand empty bottles was treated as sufficient evidence that there had been an earlier sale liable to tax. No presumption arose that the bottles, merely because they were used as containers, had not already suffered tax in an earlier sale.

Conclusion: The assessee was not the first dealer liable to tax on the bottles, and the assessment could not be sustained.

Final Conclusion: The assessment and the appellate orders were set aside and refund of tax collected, if any, was directed.

Ratio Decidendi: Where goods are shown to be second-hand and the statutory scheme is single-point taxation at the first sale, the earlier taxable sale may be inferred from the nature of the goods, and the turnover cannot be assessed again merely because the immediate seller was unregistered.

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