Oral agency orders can support tax-free local purchases where same-day despatch and contemporaneous records show a single transaction.

Oral instructions given by ex-U.P. principals, when supported by surrounding circumstances, may amount to prior purchase orders if the goods were few in number, bought and despatched the same day, and handled under a commission arrangement. On the facts described, the dealer's documents showed that the purchases, timing of despatch, quantity, and agency basis formed one continuous transaction for principals outside the State. The local purchases were therefore not the dealer's own purchases, and tax could not be levied on that basis merely because the orders were oral.

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Issues: Whether the local purchases of raab galawat and raab salawat made by the dealer on oral instructions of ex-U.P. principals and despatched on the same day were liable to be treated as the dealer's own purchases and subjected to tax.

Analysis: Oral directions received by telephone or through a representative can constitute prior purchase orders when the surrounding circumstances show that the orders were few in number, executed on the same day, and followed by immediate despatch of the purchased goods to the principals. In such a situation, maintaining a written record of every oral order was not essential. The documents produced by the dealer showed that the purchases, quantity, timing of despatch, and commission basis were consistent with agency transactions and indicated that the local purchases and despatches formed one continuous and inseparable arrangement for the ex-U.P. principals.

Conclusion: The purchases could not be treated as the dealer's own purchases, and the levy of tax on that basis was unsustainable.

Ratio Decidendi: Where contemporaneous conduct and supporting documents establish that local purchases were made and despatched as part of a single agency transaction for principals outside the State, the transactions cannot be taxed as the dealer's own purchases merely because the orders were oral.

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