Purchase tax liability requires statutory conditions and prior notice of the precise basis before enhancement is imposed.

Purchase tax liability under entry 6 of Schedule III to the Andhra Pradesh General Sales Tax Act, 1957 depends on the statutory levy point and the factual basis for shifting liability. Where the oil miller is the purchaser, liability does not automatically move to the last dealer merely because another dealer enjoyed exemption; section 6A applies only if its conditions are satisfied, including consumption in manufacture, disposal otherwise than by sale in the State, or dispatch outside the State. A revisional authority also cannot fasten liability on a ground not disclosed in the show-cause notice, as prior notice and opportunity to meet the proposed basis of enhancement are required.

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Issues: (i) Whether the petitioner could be fastened with purchase tax liability under entry 6 of Schedule III or section 6A of the Andhra Pradesh General Sales Tax Act, 1957 on the facts found. (ii) Whether the revisional order determining liability under section 6A was sustainable when the show-cause notice had not proposed that basis of liability.

Issue (i): Whether the petitioner could be fastened with purchase tax liability under entry 6 of Schedule III or section 6A of the Andhra Pradesh General Sales Tax Act, 1957 on the facts found.

Analysis: Entry 6 of Schedule III fixes the point of levy on the oil miller where groundnuts are purchased by such miller, and only in other cases does the liability fall on the last dealer. Once the Federation enjoyed exemption, the question was not automatically shifted to the petitioner as last dealer. Liability under section 6A could arise only if the statutory conditions were satisfied, namely, that the purchaser consumed the goods in manufacture or otherwise, disposed of them otherwise than by sale in the State, or dispatched them outside the State. The record did not establish the factual foundation required for fastening such liability on the petitioner.

Conclusion: The petitioner could not be held liable on the footing adopted in the impugned orders.

Issue (ii): Whether the revisional order determining liability under section 6A was sustainable when the show-cause notice had not proposed that basis of liability.

Analysis: A revisional authority cannot impose a liability on a ground not put to the assessee in the show-cause notice. The notice did not advert to liability under section 6A, yet the revisional authority proceeded to assess the petitioner on that basis. This offended the requirement of prior notice and opportunity, including the statutory obligation under section 20(4) to show cause against the proposed enhancement.

Conclusion: The revisional order was unsustainable for breach of natural justice.

Final Conclusion: The impugned appellate and revisional orders could not be sustained, and the revision petition succeeded.

Ratio Decidendi: Purchase tax liability under a shifting levy provision cannot be imposed without satisfying the statutory conditions and without prior notice to the assessee of the precise basis of proposed liability.

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