Single-point sales tax applies where an intra-State sale is taxed at the first sale in the chain.

Under the Rajasthan Sales Tax Act, 1954 and the Rajasthan Sales Tax Rules, 1955, tax was payable at the first point in a series of successive sales unless otherwise directed. A sale of white cement by a Rajasthan dealer to a firm was treated as an intra-State sale, not as an inter-State transaction under the Central Sales Tax Act, 1956. Because tax had already been paid on that completed sale at the prescribed rate, the same transaction could not be split or recharacterised to impose tax again at a later stage in the chain of sales. The first point of sale was therefore the sale by the Rajasthan dealer to the firm.

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Issues: Whether the sale of the two consignments of white cement by the Rajasthan dealer to the respondent firm was the first point of sale in the series of successive sales in Rajasthan, and whether tax paid at that stage could be treated as tax paid at the first point so as to exclude liability at a subsequent point.

Analysis: Under section 5 of the Rajasthan Sales Tax Act, 1954 read with rule 15 of the Rajasthan Sales Tax Rules, 1955, tax is payable at the first point in the series of sales by successive dealers unless otherwise directed. The goods had been despatched from Kerala and were sold while in transit, but the dispute was not treated as one of inter-State sale under the Central Sales Tax Act, 1956. The sale by the Rajasthan dealer to the respondent firm was an intra-State sale under the Rajasthan statute. Once tax had been paid on that sale at the prescribed rate, the same transaction could not be split into a sale to the dealer and a later sale to consumers for the purpose of imposing tax again at a subsequent stage. The first sale in the series was therefore the sale by the Rajasthan dealer to the respondent firm.

Conclusion: The sale in question was the first point of sale in Rajasthan, and the tax paid thereon was tax paid at the first point. No further tax was chargeable at any subsequent point, and the issue was answered in favour of the assessee.

Ratio Decidendi: Where a statute provides for single-point taxation at the first sale in a series, a completed intra-State sale on which tax has been paid cannot be recharacterised or bifurcated to levy tax again at a later stage in the same chain of sales.

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