Last-purchase levy requires clear evidence of State purchase; separate out-of-State shipment cannot be added by assumption.

A last-purchase levy under the Tamil Nadu General Sales Tax Act applies only where the purchaser's liability within the State is supported by clear evidence. The article explains that export-linked turnover from purchases made in Tamil Nadu was treated as taxable because the foreign-sale contract was separate, the petitioners were the actual exporters, and the record did not show transfer of shipping documents only after customs clearance. By contrast, the Cochin Port consignment could not be included in last-purchase turnover because there was no reliable evidence of a Tamil Nadu purchase and the factual basis for the State levy was absent. The result was partial relief through exclusion of that shipment from tax.

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Issues: (i) Whether the petitioners were the last purchasers in the State and whether the turnover relating to export-linked transactions was liable to tax under item 137 of the First Schedule to the Tamil Nadu General Sales Tax Act; (ii) Whether the turnover relating to the consignment shipped from Cochin Port could be included in the taxable last-purchase turnover.

Issue (i): Whether the petitioners were the last purchasers in the State and whether the turnover relating to export-linked transactions was liable to tax under item 137 of the First Schedule to the Tamil Nadu General Sales Tax Act.

Analysis: The turnover represented a purchase of goods within Tamil Nadu followed by exports arranged by the petitioners. The contract with the foreign buyer was found to be separate from the contract with the intermediary supplier, and the petitioners were held to be the actual exporters. The record also failed to establish that the shipping documents were transferred only after the goods had crossed the customs frontier. On that basis, the export-link contention failed and the petitioners were treated as the last purchasers in the State for the relevant turnover.

Conclusion: The levy on the export-linked turnover was upheld and the petitioners' challenge on this issue failed.

Issue (ii): Whether the turnover relating to the consignment shipped from Cochin Port could be included in the taxable last-purchase turnover.

Analysis: The authorities' conclusion that the petitioners were the last purchasers rested on their status as exporters from Tamil Nadu, but the Cochin shipment stood on a different footing. There was no reliable evidence that the petitioners purchased that consignment in Tamil Nadu, and the factual basis necessary to treat that shipment as a Tamil Nadu last purchase was absent. The inference drawn for the Madras shipments could not automatically be extended to the Cochin consignment.

Conclusion: The inclusion of the Cochin-port consignment in the taxable turnover was not sustained and the corresponding tax was deleted.

Final Conclusion: The assessment was sustained in substance, but relief was granted by excluding the Cochin shipment from the taxable turnover.

Ratio Decidendi: A transaction can be taxed as a last purchase only when the purchaser's liability within the taxing State is supported by clear evidence, and a separate shipment from outside the State cannot be brought within that liability by mere assumption from other export consignments.

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