Second sale treatment for pre-recorded cassettes requires prior tax sufferance and reasons before departing from departmental clarification.

Pre-recorded audio cassettes purchased from registered dealers after the goods had already suffered tax were treated as second sales, so the turnover could not be taxed again on the assessing authority's theory that recording made the dealer the first seller. The tribunal held that the assessing authority had to consider the Commissioner's clarification under section 28-A(3), the invoice evidence, and the prior tax sufferance, and if departing from the clarification, it was required to record reasons. The impugned assessment was set aside and the matter remanded for fresh consideration in accordance with law.

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Issues: Whether the turnover relating to pre-recorded audio cassettes was liable to be taxed as first sale under section 3(2) of the Tamil Nadu General Sales Tax Act, 1959, or was exempt as second sales after the goods had already suffered single point tax, and whether the assessment could be sustained without proper consideration of the Commissioner's clarification under section 28-A(3).

Analysis: The assessment record showed that the petitioner purchased pre-recorded cassettes from registered dealers within the State and that tax had already been charged at the earlier point of sale. The clarification circulars issued by the Commissioner of Commercial Taxes indicated that such local purchases of pre-recorded cassettes are second sales not liable to tax, and that blank or unrecorded cassettes which had already suffered single point levy were not to be taxed again after recording. The assessing authority's view that the recording process made the petitioner the first seller was not accepted, particularly since the authority did not properly address the nature of the earlier transaction, the invoice evidence, or the binding effect of the clarification. The order also required the assessing authority, if deviating from the clarification in force, to record reasons as a quasi-judicial authority.

Conclusion: The turnover could not be finally sustained on the reasoning adopted in the impugned order, and the assessment was set aside with a direction to redo it after verifying prior tax sufferance and considering the relevant clarification, appellate order, and other material.

Final Conclusion: The petitioner obtained partial relief, since the adverse assessment was annulled and the matter was sent back for a fresh decision in accordance with law.

Ratio Decidendi: Where the goods have already suffered tax at the earlier point of sale and the applicable departmental clarification treats such later sale as a second sale, the assessing authority must apply that clarification or give reasons for departure before levying tax again.

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