Second-sale exemption in single-point tax regimes requires only proof of prior sale, not prior tax liability.

In a single-point sales tax regime, a subsequent seller need only establish that there was an earlier sale within the State to claim second-sale exemption; proof that the earlier seller actually suffered tax is not required. On the facts, the records showed tax had been collected and paid by the earlier seller, whose assessment remained undisturbed, so the assessee's purchase qualified as a second sale entitled to exemption. A revisional authority could not, in proceedings against the assessee, treat the non-party seller as an unregistered dealer, impose penalty on that seller, or recharacterise tax already paid as penalty without separate proceedings and hearing. The revisional order restoring the assessment was set aside.

---

---

Issues: Whether the assessee was entitled to exemption on the ground that the purchase in question was a second sale, and whether the revisional authority could treat the amount paid by the seller as penalty and disturb the appellate relief granted to the assessee.

Analysis: The sale of groundnut being a single-point levy, the assessee, as a subsequent seller, was only required to show that there had been an earlier sale in the State and was not obliged to prove that the earlier seller had in fact suffered tax. The records and bills showed that the seller had collected tax and paid it to the Revenue, and the final assessment of that seller had not been disturbed. The revisional authority, while proceeding under section 34 of the Tamil Nadu General Sales Tax Act, could not in the assessee's proceedings determine that a non-party seller was an unregistered dealer, levy penalty under section 22(2), or convert the tax already paid by that seller into penalty without separate proceedings and without hearing that seller. The authorities relied on the wrong premise that the assessee's purchase was the first sale.

Conclusion: The assessee's purchase was held to be a second sale entitled to exemption, and the revisional order restoring the assessment was set aside in favour of the assessee.

Ratio Decidendi: In a single-point sales tax regime, a subsequent seller need only establish a prior sale in the State, and a revisional authority cannot, in proceedings against that seller, levy penalty on a non-party or recharacterise tax paid by that non-party as penalty without independent proceedings and hearing.

---