Purchase tax on old jewellery used in manufacture upheld, while stock record defects supported assessment addition in revision.

Old and worn-out jewellery purchased and used in manufacturing new jewellery was treated as taxable at the last purchase point under the Tamil Nadu General Sales Tax Act, and the Tribunal upheld purchase tax under Section 7A on that basis. Defects in stock records and bought notes, including the absence of separate accounts for old and new jewellery and unverifiable seller particulars, justified the ad hoc addition in assessment; the challenge was treated as a factual issue and no legal infirmity warranting revision was found.

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Issues: (i) Whether old jewellery purchased and used in the manufacture of new jewellery was liable to purchase tax under Section 7A and the relevant schedule entries of the Tamil Nadu General Sales Tax Act; (ii) Whether the ad hoc addition made in assessment on account of defects in stock records and bought notes could be interfered with in revision.

Issue (i): Whether old jewellery purchased and used in the manufacture of new jewellery was liable to purchase tax under Section 7A and the relevant schedule entries of the Tamil Nadu General Sales Tax Act.

Analysis: The assessment record showed that old and worn-out jewellery was taxable at the last purchase point under the relevant entry in Part A of the First Schedule, and that gold and silver jewellery were separately brought under a different entry. The Tribunal found that the assessee purchased old jewellery and used it in manufacturing new jewellery, which attracted purchase tax under Section 7A. The finding was based on the statutory entries and the manner in which the goods were dealt with by the assessee.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the ad hoc addition made in assessment on account of defects in stock records and bought notes could be interfered with in revision.

Analysis: The Tribunal noted that no separate stock account was maintained for old and new gold jewellery and that the bought notes did not contain complete and correct particulars of the sellers, making them unverifiable. In view of these defects, the Tribunal sustained the addition. The challenge was treated as raising a pure question of fact, and no jurisdictional or legal infirmity was shown for interference in revision.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The revision failed because the taxability of the old jewellery purchase and the factual basis for the addition were both upheld, leaving no ground for interference.

Ratio Decidendi: Where old jewellery is purchased and used in manufacturing new jewellery, and the statutory schedule and Section 7A bring such turnover within tax, concurrent factual findings sustaining assessment additions will not be disturbed in revision absent legal error.

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