Declared goods exemption under central sales tax depends on proof of prior state tax payment by the dealer claiming relief.

Exemption from central sales tax on inter-State sales of declared goods was available only if the dealer proved that the goods had already suffered levy and collection of tax under the relevant State sales tax law. The governing scheme under Section 8(5) of the Central Sales Tax Act, read with Section 15 and the State Government order issued under that provision, placed the burden on the assessee to establish prior tax payment on the local sale or purchase. On the facts, the assessee failed to do so because the suppliers were found to be non-existent or to have misused registration certificates, and there was no satisfactory proof of prior taxation. The claim for exemption was therefore rejected and the inter-State turnover remained taxable.

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Issues: Whether the assessee was entitled to exemption from central sales tax on inter-State sales of groundnut kernels, a declared good, by proving that the goods had already suffered tax under the State sales tax law.

Analysis: Groundnut kernel was treated as declared goods, and the governing scheme under Section 8(5) of the Central Sales Tax Act, 1956, read with Section 15 of that Act and the State Government order issued under Section 8(5), permitted exemption only where the dealer established that tax had been levied and collected on the local sale or purchase under Section 4 of the Tamil Nadu General Sales Tax Act, 1959. The burden lay on the assessee to prove prior levy and collection of tax on the declared goods. On the facts, the sellers from whom the assessee purchased were found to be non-existing or to have misused registration certificates, and there was no satisfactory proof that the goods had in fact suffered tax.

Conclusion: The assessee failed to discharge the burden of proving prior levy and collection of tax on the declared goods, and the claim to exemption from central sales tax was rejected.

Final Conclusion: The inter-State turnover remained taxable under the Central Sales Tax Act, and the revision was liable to fail.

Ratio Decidendi: Exemption from central sales tax on inter-State sales of declared goods is available only when the dealer proves that the goods had already suffered tax under the relevant State law, and the burden of such proof lies on the dealer claiming the exemption.

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