Single-point sales tax levy barred reassessment on old conveyor belts where departmental clarification fixed the taxable stage.

The reassessment levying 12% tax on turnover from old conveyor belts purchased from the Tamil Nadu Electricity Board was unsustainable because the departmental clarification treated such sales as exempt second sales up to 30.06.2002 and taxable only at 1% resale tax from 01.07.2002. Applying the single-point levy principle, the goods could not be taxed at the original point or again at a subsequent point once the State had fixed one taxable point and granted exemption at that stage. The assessee's earlier assessments had been accepted on the same basis, so the later reassessment departing from that position without justification was set aside, along with the appellate order.

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Issues: Whether the reassessment levying tax at 12% on the turnover of old conveyor belts purchased from the Tamil Nadu Electricity Board, for the assessment year 2004-05, was sustainable in light of the earlier departmental clarification and the governing principle that the goods were taxable only at the specified single point.

Analysis: The clarification issued by the commercial taxes authority stated that sales of old conveyor belts purchased from the Tamil Nadu Electricity Board were exempt as second sales up to 30.06.2002 and were liable only to resale tax at 1% from 01.07.2002 onwards. The Supreme Court principle relied on made it clear that where the State fixes a single point of levy and grants exemption at that point, the goods cannot be subjected to tax at either that point or a subsequent point in the State. The record also showed that for earlier assessment years the petitioner's claim had been accepted on the same basis, while the impugned reassessment departed from that position without justification.

Conclusion: The reassessment levying 12% tax was unsustainable and was set aside along with the appellate order affirming it.

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