Purchase tax on rice-mill paddy purchases must be computed on the full taxable turnover without deductions for rice and bran sales.

Under Section 5A of the Kerala General Sales Tax Act, purchase tax on paddy bought by a rice mill was to be computed on the full taxable turnover without deducting the tax relatable to the sale of rice and bran. The Court treated the later Kerala precedent on rice-mill assessments as the controlling law, distinguishing the earlier Supreme Court ruling relied on by the Tribunal. On that basis, the Tribunal's deduction-based approach was not sustainable, and the levy had to be assessed on the entire purchase turnover.

---

---

Issues: Whether purchase tax under Section 5A of the Kerala General Sales Tax Act on paddy purchased by a rice mill was required to be computed on the entire turnover without reducing the tax relatable to sale of rice and bran.

Analysis: The assessment in question had levied purchase tax on paddy, while granting exemption only on the balance after taking into account the tax payable on the sale of rice and bran. The Tribunal had interfered on the strength of an earlier decision, but the Court held that the controlling law was the later decision distinguishing the earlier Supreme Court ruling and applying the correct principle to rice-mill assessments. Since the facts were materially similar to the earlier binding Kerala decision, the Tribunal's approach could not be sustained.

Conclusion: The levy of purchase tax had to be made on the entire sales without any deduction towards the sale of rice and rice bran, and the Tribunal's order was liable to be set aside.

Final Conclusion: The revisions succeeded, and the State's position on the manner of computing purchase tax was upheld.

Ratio Decidendi: Where the governing precedent on rice-mill assessments requires levy on the full taxable base, deduction of the sale value of rice and bran is not permissible while computing purchase tax under Section 5A.

---