Purchase tax under Bombay sales law applies only to business purchases from an unregistered dealer, not from a non-dealer.

Section 13 of the Bombay Sales Tax Act, 1959 applies only where a taxable dealer purchases specified goods from a seller who is a dealer but not registered under the Act; a purchase from a person who is not a dealer falls outside the provision. It also operates only when the goods are purchased in the course of the buyer's business activity in those goods, not for purposes unconnected with that business. The assessee bears the burden of showing that the seller was not a dealer. On that construction, purchase tax is confined to business purchases from an unregistered dealer and does not extend to non-business purchases or purchases from a non-dealer.

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Issues: (i) whether purchase tax under section 13 of the Bombay Sales Tax Act, 1959 is leviable where the goods are purchased from a person who is not a dealer within the meaning of the Act; (ii) whether purchase tax under section 13 is attracted only when the purchase is made in the course of the dealer's business in the goods purchased.

Issue (i): whether purchase tax under section 13 of the Bombay Sales Tax Act, 1959 is leviable where the goods are purchased from a person who is not a dealer within the meaning of the Act.

Analysis: Section 13 fastens purchase tax on a dealer liable to pay tax under section 3 when he purchases specified goods from a person who is not a registered dealer. The expression "unregistered dealer" presupposes that the seller is a dealer; it does not extend to every person who is merely unregistered. Read with the definitions of "dealer" and "registered dealer", the provision applies only where the seller is a dealer but not registered. A purchase from a person who is not even a dealer falls outside the section. The assessee bears the burden of showing that the seller was not a dealer.

Conclusion: Purchase tax was not leviable on the impugned purchase because the seller was not a dealer within the meaning of the Act.

Issue (ii): whether purchase tax under section 13 is attracted only when the purchase is made in the course of the dealer's business in the goods purchased.

Analysis: The liability under section 13 is confined to purchases made by a dealer in respect of goods forming part of his business activity. A dealer is taxable only in relation to the business in which he carries on buying or selling of those goods. Purchases of goods for purposes unconnected with the dealer's business, including goods not dealt in by him, do not answer that description. The provision's resale exception also indicates that the section is aimed at goods intended for trading and not for personal or other non-business use.

Conclusion: Purchase tax could not be levied because the assessee was not a dealer in motor cars and the purchase was not in the course of its business in that commodity.

Final Conclusion: The reference was answered by holding that section 13 did not apply to the purchase in question, and the assessee was not liable to purchase tax on the car.

Ratio Decidendi: Section 13 of the Bombay Sales Tax Act, 1959 applies only to purchases by a taxable dealer from a seller who is himself a dealer but unregistered, and only in relation to purchases made in the dealer's business activity in those goods.

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