Purchaser exemption blocks indirect sales tax recovery from seller where the statutory scheme contemplates single-stage taxation.

Exemption notifications under section 9(1) of the Andhra Pradesh General Sales Tax Act protected purchases made by exempt entities such as Tirumala Tirupathi Devasthanams and a Girijan Society. Because the purchasers were exempt on those transactions, the seller could not be made liable for sales tax merely because the notifications did not expressly name the selling dealer. The analysis relied on the distinction between levy and collection, and on the principle that a purchase-stage exemption in a single-stage taxation scheme prevents indirect recovery from the seller. The result stated in the text is that sales to the exempt purchasers were not taxable in the dealer's hands, with consequential refund or adjustment directed.

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Issues: Whether sales made by the dealer to purchasers who were exempted from tax under the relevant Government Orders could still be subjected to sales tax in the dealer's hands.

Analysis: The exemption notifications issued under section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957 extended tax relief to the Tirumala Tirupathi Devasthanams and the Girijan Society in respect of purchases made by them. Once the purchasing entities were exempt from tax on the transactions, the seller could not be made to bear the tax burden merely because the notifications did not expressly refer to the selling dealer. The reasoning was reinforced by the principle that collection and levy are distinct, and by the earlier Supreme Court view that a tax exemption affecting the purchasing stage can prevent shifting the burden to the seller where the statutory scheme contemplates single-stage taxation.

Conclusion: The sales effected by the dealer to the exempt purchasers were not liable to be taxed in the dealer's hands.

Final Conclusion: The revision cases succeeded, the tribunal's orders were set aside, and the matters were sent back for consequential action including refund or adjustment of excess tax, if any.

Ratio Decidendi: Where a statutory exemption clearly protects the purchaser from tax on the relevant transactions, the revenue cannot indirectly recover the same tax from the seller in respect of those exempt purchases.

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