Second sale exemption turns on proof of subsequent taxable sale, not actual tax payment by the earlier seller.

Second sale exemption was allowed for turnover from purchases of iron scrap where the assessee produced purchase bills, seller registration details and addresses, and otherwise supported the genuineness of the transactions. The governing principle was that, to claim second sale treatment, the assessee need not prove that the earlier seller actually paid tax; it was enough to show that the earlier transaction was a taxable sale and that the assessee's sale was only a subsequent sale. As the Revenue did not establish that the assessee's sales were first sales, the revision under section 34 was held unsustainable and the exemption was restored.

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Issues: Whether the assessee was entitled to second sale exemption on the turnover relating to purchases from Jayachandra Traders and Dinakar Traders, and whether the Joint Commissioner was justified in revising the Appellate Assistant Commissioner's order under section 34 of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The turnover in question was claimed to be a subsequent sale of iron scrap, and the assessee produced purchase bills containing the seller's registration particulars and address. The determining principle was that, to claim exemption as a second sale, the assessee was not required to prove that the earlier seller had actually paid tax. It was sufficient to show that the earlier transaction was a taxable sale and that the sale by the assessee was only a subsequent sale. The record showed identifiable sellers and materials supporting the genuineness of the transactions, while the Revenue had not established that the assessee's sales were first sales so as to attract tax in its hands.

Conclusion: The assessee succeeded. The revisional order was unsustainable, and the exemption as second sale was restored for the disputed turnover.

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