Second sales exemption depends on reliable proof of seller registration cancellation and supporting evidence, not mere departmental assertion.

Second sales exemption under section 10 of the Tamil Nadu General Sales Tax Act, 1959 depended on the registration status of the selling dealers and the supporting records produced by the assessee. The appellate record showed that one dealer's cancellation was recorded after the relevant period, while the other dealer's cancellation dates were inconsistent, and renewal-fee receipts were also produced. On that material, the exemption claim was accepted because reliable proof of valid cancellation of the sellers' registration certificates was not established, and the claim could not be rejected on the assessing authority's assertions alone. The Tribunal's affirmation reflected the same appreciation of evidence.

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Issues: Whether the assessee was entitled to claim second sales exemption under section 10 of the Tamil Nadu General Sales Tax Act, 1959 on the basis of the registration status of the selling dealers and the materials produced, and whether the finding allowing the exemption was sustainable.

Analysis: The assessment related to the year 1989-90. The exemption claim was examined with reference to the registration certificates of the alleged sellers, the dates of cancellation recorded by the department, and the renewal-fee receipts produced for the relevant year. One dealer's cancellation was shown to be subsequent to the relevant period, and as regards the other dealer the dates of cancellation were inconsistent. On the materials available, the appellate authority found that reliable proof of actual cancellation of the sellers' registration certificates was lacking and that the assessee's claim of second sales could not be rejected merely on the basis asserted by the assessing authority. The Tribunal affirmed that appreciation of the record.

Conclusion: The exemption claim was rightly accepted, and the challenge to the allowance of second sales exemption failed.

Ratio Decidendi: A second sales exemption cannot be denied without reliable material showing that the alleged selling dealers were not validly registered or that the claim is otherwise unsupported by the evidence on record.

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