Purchase tax on gold ornaments turns on proof that bought goods were new, not old, and exemption failed.

Purchase tax under section 5A was held applicable because the assessee failed to prove that the gold ornaments bought from individual sellers were new goods. The purchase bills lacked the required particulars and did not comply with rule 32(12A), and the surrounding evidence, including the nature of the suppliers and the assessee's own conduct in taxing later sales, pointed to purchases of old gold ornaments. On that basis, the claimed exemption was rejected and the turnover was brought to purchase tax.

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Issues: Whether the purchase turnover of gold ornaments was liable to purchase tax under section 5A of the Kerala General Sales Tax Act, 1963, and whether the assessee had proved that the goods purchased were new gold ornaments rather than old gold ornaments.

Analysis: The purchase bills did not contain the details of the articles purchased and were not in conformity with rule 32(12A) of the Kerala General Sales Tax Rules. The materials on record did not substantiate the claim that the purchases were of new gold ornaments from the individual sellers. The surrounding circumstances, including the nature of the suppliers and the assessee's own conduct in paying tax on the subsequent sales, supported the view that the purchases were of old gold ornaments. The arrangement was treated as one designed to avoid tax liability, and the assessee failed to establish entitlement to exemption.

Conclusion: The purchase turnover was rightly brought to tax as purchase tax on old gold ornaments, and the assessee's challenge failed.

Ratio Decidendi: Where the assessee fails to prove that gold ornaments purchased from individuals are new goods and the surrounding evidence shows the goods to be old ornaments, purchase tax under section 5A is attracted.

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