Form 32 is not conclusive proof against purchase tax; all relevant evidence must be examined before levy is sustained.

In a single-point levy on declared goods, Form 32 was treated only as evidentiary support and not as conclusive proof that the assessee was not the first purchaser. The burden remained on the assessee to establish non-liability with acceptable evidence. The assessing authority also could not sustain purchase tax solely on cross-verification with sellers without properly considering the assessee's purchase bills and other material. The assessment was therefore required to be reconsidered on all relevant evidence, and the levy on groundnut turnover was set aside with a fresh assessment directed after giving the assessee an opportunity to produce evidence.

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Issues: (i) whether production of form 32 was conclusive to establish that the assessee was not the first purchaser of declared goods and thereby exempt from purchase tax; (ii) whether the assessing authority could sustain the levy solely on cross-verification with the sellers without proper consideration of the assessee's purchase bills and other evidence.

Issue (i): whether production of form 32 was conclusive to establish that the assessee was not the first purchaser of declared goods and thereby exempt from purchase tax.

Analysis: Under section 5(4) of the Karnataka Sales Tax Act, 1957 and rule 26(9)(a) of the Karnataka Sales Tax Rules, 1957, declared goods were subject to single-point levy at the first sale or first purchase in the State. Form 32 was a declaration supporting the claim that tax had already attached at the appropriate point, but it did not by itself conclusively establish that the assessee was not the first purchaser. The burden remained on the assessee to show, by acceptable evidence, that the purchases were not the first taxable purchases.

Conclusion: Form 32 was not conclusive, and the assessee was required to adduce additional acceptable evidence to establish non-liability.

Issue (ii): whether the assessing authority could sustain the levy solely on cross-verification with the sellers without proper consideration of the assessee's purchase bills and other evidence.

Analysis: The record showed that the assessing authority relied mainly on information obtained from sellers through cross-verification. The assessee had produced purchase bills, and the authorities below proceeded on the mistaken assumption that no material existed beyond form 32. Since the assessee had no effective access to the sellers' account books, the material gathered from the sellers had to be weighed against the assessee's documents. The assessment could not rest only on untested cross-verification when the assessee's own evidence had not been properly examined.

Conclusion: The levy could not be sustained on the basis adopted, and the assessment required reconsideration after allowing the assessee to produce evidence.

Final Conclusion: The revision succeeded to the extent that the purchase tax levy on groundnut turnover was set aside and the matter was sent back for a fresh assessment in accordance with law after giving the assessee an opportunity to produce evidence.

Ratio Decidendi: In a single-point levy on declared goods, a statutory declaration form is only evidentiary and not conclusive; the assessing authority must determine liability on the basis of all relevant material and cannot uphold tax merely on unexamined cross-verification when the assessee has produced purchase evidence.

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