Single-point sales tax levy cannot shift to a later seller merely because the first seller was below the taxable threshold.

Purchase tax under Section 7A of the Tamil Nadu General Sales Tax Act could not be levied on the assessee where the statutory conditions for that charge were not established and the goods had not suffered tax only because the first seller's turnover was below the taxable threshold. The HC noted that Section 3(1) imposed liability only when the prescribed turnover limit was crossed, while Section 7A operated as a separate purchase tax provision only in the circumstances specified by the Act. Since the levy was fixed at the point of first sale and no provision treated a later sale as the first taxable sale, the tax burden could not be shifted to the second seller. The revision failed and the order in favour of the assessee was confirmed.

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Issues: Whether purchase tax under Section 7A of the Tamil Nadu General Sales Tax Act could be levied on the assessee when the goods had not suffered tax at the first sale because the first seller's turnover was below the taxable limit and the statute fixed the levy at the point of first sale.

Analysis: Section 3(1) fixed liability to tax on dealers only when the prescribed turnover threshold was crossed, while Section 7A created a separate purchase tax charge that applied only when the statutory conditions for such levy were satisfied. On the admitted facts, the assessee had effected only local sales of bakery products and none of the conditions attracting Section 7A was established. The point of levy having been fixed at the first sale, the mere fact that the first seller was not assessed because of the turnover limit did not justify shifting the tax burden to the second seller. The Court also applied the principle that where the statute fixes a single point levy at the first sale, the State cannot treat a later sale as taxable in the absence of a specific provision making it the first taxable sale.

Conclusion: The levy under Section 7A was unsustainable and the assessee succeeded on the issue.

Final Conclusion: The revision failed, and the Tribunal's order in favour of the assessee was confirmed.

Ratio Decidendi: Where a sales tax statute fixes liability at the point of first sale and does not provide for taxation at the first taxable sale, tax cannot be shifted to a subsequent seller merely because the first seller was exempt or went untaxed due to the turnover threshold.

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