Repeated sales tax on already taxed paper goods barred where envelopes were later sold from the same material.

Paper that had already suffered tax on the relevant sale could not be taxed again when used to manufacture envelopes, because the decisive question was whether the later transaction was a first sale or a second sale. The court held that the proviso against repeated taxation applied once the goods had suffered tax under the relevant schedule entries, and an earlier levy collected at the wrong rate did not permit a fresh tax on the subsequent sale of the envelopes. The revenue's contention was rejected and the assessee's position remained undisturbed.

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Issues: Whether envelopes manufactured out of printed paper, which had already suffered tax at the earlier sale, could be taxed again under entry 117 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The disputed paper was treated as having already suffered tax when first sold, though the initial levy had been made at the wrong rate. The decisive consideration was whether the later transaction was a first sale or a second sale. Since the proviso barred repeated taxation once paper had suffered tax under the relevant items, the subsequent sale of envelopes made from the same paper could not be brought to tax again merely because the earlier collection had been at a mistaken rate.

Conclusion: The later sale of the envelopes was not liable to be taxed again and the contention of the Revenue was rejected.

Final Conclusion: The tax case failed and the dismissal left the assessee's position undisturbed.

Ratio Decidendi: Where goods have already suffered tax on the relevant sale, a subsequent sale of articles manufactured from the same goods cannot be subjected to tax again merely because the earlier levy was collected at an incorrect rate.

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