Purchase tax under section 5A turns on statutory conditions; own-consumption petrol and fully exempt asphalt escaped levy.

Section 5A imposes purchase tax only when the statutory conditions for purchase liability are met. Petrol bought for the company's own consumption was outside the charge because it was not purchased in the course of business. Asphalt/bitumen covered by a total exemption notification could not be taxed on the corresponding purchase turnover. By contrast, the Schedule I exclusion for sales by one oil company to another did not displace the independent purchase-tax charge under section 5A, and petroleum products despatched outside the State, including exports, remained taxable where clause (c) was satisfied.

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Issues: (i) whether the purchase turnover of petrol used by the assessee for own consumption was liable to tax under section 5A; (ii) whether the sale of asphalt/bitumen by Cochin Refineries Ltd. to the assessee was wholly exempt and, if so, whether the corresponding purchase turnover could be taxed; (iii) whether the purchase turnover of petroleum products purchased from Cochin Refineries Ltd. was outside the scope of section 5A because of the Schedule I entry excluding sales by one oil company to another; and (iv) whether the purchase turnover of petroleum products despatched outside the State, including exports to countries outside India, was exigible to purchase tax under section 5A.

Issue (i): whether the purchase turnover of petrol used by the assessee for own consumption was liable to tax under section 5A.

Analysis: Section 5A fastens purchase tax where the goods purchased are dealt with in the circumstances mentioned in the provision. The Court held that petrol bought for use by the company and its officers was not purchased in the course of "business" as defined in section 2(vi) as it then stood. Such consumption was therefore outside the charging provision.

Conclusion: The purchase turnover of petrol used for own consumption was not liable to tax.

Issue (ii): whether the sale of asphalt/bitumen by Cochin Refineries Ltd. to the assessee was wholly exempt and, if so, whether the corresponding purchase turnover could be taxed.

Analysis: The notification issued under section 10 was read as granting a total exemption for the sale of asphalt/bitumen by Cochin Refineries Ltd. to the assessee and onward sales by the assessee to another oil company. Once the exemption was total, the purchase turnover could not be brought to tax.

Conclusion: The purchase turnover relating to asphalt/bitumen was not exigible to tax.

Issue (iii): whether the purchase turnover of petroleum products purchased from Cochin Refineries Ltd. was outside the scope of section 5A because of the Schedule I entry excluding sales by one oil company to another.

Analysis: The Schedule I entry governed the point of levy under section 5 and exempted only sales by one oil company to another at that point. Section 5A is an independent charging provision levying tax at the purchase point. The Schedule I exclusion did not operate to defeat liability under section 5A where the statutory conditions for purchase tax were satisfied.

Conclusion: The Schedule I exclusion did not bar levy of purchase tax under section 5A on such petroleum products.

Issue (iv): whether the purchase turnover of petroleum products despatched outside the State, including exports to countries outside India, was exigible to purchase tax under section 5A.

Analysis: The Court held that despatch of the purchased goods to depots outside the State, and export despatch outside India, fell within clause (c) of section 5A(1) because the goods were despatched to places outside the State otherwise than as a direct result of inter-State trade or commerce. Even if the export transaction was treated as a local sale for some purposes, that did not prevent the operation of section 5A, which is triggered by the statutory conditions in clauses (a), (b) or (c).

Conclusion: The purchase turnover relating to goods despatched outside the State and exported outside India was liable to purchase tax under section 5A.

Final Conclusion: The Court sustained the levy of purchase tax on petroleum products where the statutory conditions for section 5A were met, while excluding only the turnover relating to petrol used for own consumption and the asphalt turnover covered by the exemption notification.

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