Purchase tax on raw bones turned on whether conversion amounted to manufacture, and a legal concession did not bar challenge.

Section 6A purchase tax applied only when goods bought from unregistered dealers were consumed in manufacture; the article notes that converting raw bones into crushed bones, bone meal, bone sinews, horns and hooves was treated as not amounting to such consumption, following the Supreme Court view in A.A. Sulaiman. It also explains that a concession on a point of law before the Tribunal did not bind the assessee or prevent a later challenge once the Supreme Court position prevailed.

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Issues: (i) Whether purchase tax under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 could be levied on raw bones purchased from unregistered dealers and converted into crushed bones, bone meal, bone sinews, horns and hooves. (ii) Whether a concession made before the Tribunal regarding bone meal and bone sinews barred the assessee from challenging the tax levy before the High Court.

Issue (i): Whether purchase tax under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 could be levied on raw bones purchased from unregistered dealers and converted into crushed bones, bone meal, bone sinews, horns and hooves.

Analysis: The provision attracted purchase tax only where goods purchased from unregistered dealers were consumed in the manufacture of other goods. The Court compared the Andhra Pradesh provision with the corresponding provisions considered in the Madras and Kerala decisions. It accepted the reasoning approved by the Supreme Court in A.A. Sulaiman, namely, that raw bones are not consumed in the manufacture of the resultant products and that no manufacture, in the relevant sense, takes place when raw bones are converted into crushed bones, bone meal, bone sinews, horns and hooves. The Court also held that the law declared by the Supreme Court prevails over the earlier coordinate Bench decision of the High Court.

Conclusion: Purchase tax under section 6A was not leviable on the purchase of raw bones, and the levy on the assessee failed.

Issue (ii): Whether a concession made before the Tribunal regarding bone meal and bone sinews barred the assessee from challenging the tax levy before the High Court.

Analysis: A concession on a point of law does not bind the client and cannot constitute a binding precedent. The concession before the Tribunal was also made when the earlier High Court decision still held the field, and it could not prevent the assessee from contending before the High Court that the later Supreme Court decision had altered the legal position. The Court therefore rejected the Revenue's reliance on the concession.

Conclusion: The concession did not bar the assessee from challenging the levy.

Final Conclusion: The revisional order and the appellate order were unsustainable, and the assessee succeeded in setting aside the tax demand on the disputed raw-bone purchases.

Ratio Decidendi: Where the Supreme Court has approved the legal reasoning that raw bones are not consumed in the manufacture of the resultant products, purchase tax provisions applying to consumption in manufacture cannot be invoked, and a concession on a point of law does not preclude correction of that position in later proceedings.

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