Tax-paid goods status depends on purchase from a registered dealer; prior tax payment in the chain does not suffice.

A motor vehicle purchased from an unregistered dealer could not be treated as "tax-paid goods" for deduction under the M.P. General Sales Tax Act, because the statutory definition required purchase by the dealer from a registered dealer within the State. The fact that tax had earlier been paid in an earlier sale did not cure the defect in the immediate transaction. As the assessee bought the matador from an unregistered dealer, the condition for tax-paid goods was not met, and the deduction under section 2(r)(ii) was denied.

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Issues: Whether a motor vehicle purchased from an unregistered dealer, though earlier purchased by that dealer from a registered dealer after payment of tax, could be treated as "tax-paid goods" under section 2(rr) of the M.P. General Sales Tax Act and qualify for deduction under section 2(r)(ii).

Analysis: The definition of "tax-paid goods" requires that the goods be purchased by the dealer from a registered dealer inside the State of Madhya Pradesh within the meaning of section 4 of the Central Sales Tax Act, 1956. On the facts found, the assessee purchased the matador from an unregistered dealer. The statutory condition of purchase from a registered dealer was therefore not satisfied, and the character of the goods as tax-paid goods could not be sustained.

Conclusion: The matador was not tax-paid goods and the assessee was not entitled to deduction under section 2(r)(ii); the question was answered in the negative, against the assessee and in favour of the Revenue.

Ratio Decidendi: Goods can be treated as tax-paid goods only when they are purchased by the dealer from a registered dealer, and the statutory condition cannot be satisfied through a purchase from an unregistered dealer merely because tax had earlier been paid in the chain of prior sale.

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