Purchase tax on tin sheets failed where mere use in manufacture was not consumption under the unamended provision.

Tin sheets that were only used, and not consumed, in manufacturing tin containers did not attract purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959 for assessment periods before 1 January 1987. The unamended provision applied only where goods were consumed in manufacture, and the later insertion of the word "uses" by the 1986 amendment indicated that mere use was insufficient earlier. Because the tin sheets retained their character, nature and identity, they were not treated as consumed goods, and the tax demand failed in favour of the assessee.

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Issues: Whether tin sheets that were only used, and not consumed, in the manufacture of tin containers attracted purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, for assessment periods prior to 1 January 1987.

Analysis: Section 7-A, as it then stood, covered goods that were consumed in the manufacture of other goods; the later insertion of the word "uses" by the 1986 amendment showed that mere use was not enough under the unamended provision. The tin sheets retained their character, nature and identity and were not consumed in the manufacture of tin containers. The relevant assessment periods were before the amendment took effect.

Conclusion: The tin sheets did not attract purchase tax under section 7-A for the periods in question, and the answer was in the negative, in favour of the assessee.

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