Second purchase exemption for single-point goods depends on proof of prior tax payment in the sellers' hands.

The Madras High Court upheld a Tribunal remand directing verification of whether groundnut kernel had already suffered single-point tax in the sellers' hands, which would determine whether the assessees' purchases were exempt as second purchases. The assessees claimed exemption on that basis, while the revenue argued that the sellers were only commission agents or brokers and that the purchases were the first taxable point. Because the bills and surrounding circumstances did not conclusively establish prior tax payment, the assessing authority had to examine the relevant records and facts before fresh disposal on merits. No interference with the remand was warranted.

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Issues: Whether the Tribunal was right in remanding the matter for verification of whether the groundnut kernel had already suffered tax in the hands of the sellers so as to determine whether the assessees' purchases were second purchases exempt from tax.

Analysis: The assessees claimed exemption on the footing that the purchases were second purchases of single-point goods. The revenue disputed this and contended that the sellers were only commission agents or brokers and that the assessees' purchases were the first taxable purchases. The material before the Tribunal did not conclusively show whether the sellers had already paid the single-point tax on the goods. The entries in the bills and the surrounding circumstances created doubt, and the question required verification of the relevant records and facts by the assessing authority.

Conclusion: The remand ordered by the Tribunal for verification and fresh disposal on merits was upheld, and no interference was called for.

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