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Issues: Whether the purchase turnover of sand and blue-metal used by a building contractor in the construction of buildings was liable to purchase tax under section 7-A(1)(a) or section 7-A(1)(b) of the Tamil Nadu General Sales Tax Act, 1959.
Analysis: Section 7-A(1)(a) applies where goods purchased are consumed in the manufacture of other goods for sale or otherwise. The use of building materials in constructing buildings does not amount to consumption in the manufacture of other goods, because a building is immovable property and not "other goods" within the provision. The clause is confined to manufacture of movable goods and does not extend to construction activity. Section 7-A(1)(b) also does not apply, because mere use of goods in construction is not a disposal of those goods otherwise than by way of sale. There must be a transfer or disposal to another person in a manner other than sale, which is absent here.
Conclusion: The disputed purchase turnover was not taxable under section 7-A(1)(a) or section 7-A(1)(b), and the revenue's challenge failed.
Ratio Decidendi: Goods purchased and used in the construction of buildings are not consumed in the manufacture of other goods for sale and their use in construction is not a disposal otherwise than by way of sale for the purpose of purchase tax.
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